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tv   U.S. Senate  CSPAN  January 31, 2012 12:00pm-5:00pm EST

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consent that further reading of the amendment be suspended. the presiding officer: without objection. mr. mccain: this bipartisan amendment is simple. it would prohibit bonuses for senior executives at fannie fannie mae and freddie mac. i'm joined by senators rockefeller, enzi, johanns, barrasso, blunt, graham, coburn, and thune. since they're placed in conservatorship in 2008 these government-sponsored entities have soaked the american taxpayer fear nearly $170 billion in bailouts. recently freddie mac requested an additional $6 billion and fannie mae requested an additional $7.8 billion. that's $13.8 billion more coming out of the pockets of hard-working americans, many of which are underwater on their mortgages. now, i'd like to read a article
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from "politico" back in october titled "fannie and freddie bailout big bonuses." federal finance agency, the government regulator for fannie and freddie approved $12.7 million in bonus pay after ten executives from the two government-sponsored corporations last year met modest performance targets tied to modifying mortgages in jeopardy of foreclosure. executives got the bonuses about two years after the federally-backed mortgage giants received nearly $170 billion in taxpayer bailouts and despite pledges by f.h.a., the office tasked with keeping them solvent that it would adjust the level of c.e.o. level pay after critics slammed huge compensation packages paid out to former fannie mae c.e.o. franklin reigns and others.
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securities and exchange commission documents show that ed haldemann, who announced last week he's stepping down as freddie mac's c.e.o., received a base salary of $900,000 last year yet took home an additional $2.3 million in bonus pay. records show other fannie and freddie executives got similar wall street-style compensation packages. fannie mae c.e.o. michael williams, for example, got $2. $2.37 million in performance bonuses, including haldemann, the top fiv officers at fannie e bank $5.6 million in performance bonus pay alone last year, though a second bonus installment for 2010 has yet to be reported. according to agency records, williams and other at fannie pock etd $6.33 in incentives for what s.e.c. records described as meeting the primary goal of providing liquidity, stability and affordability."
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i think it's important to ask the question here: is it really necessary for these bonuses to be provided to these executives when we have men and women who are literally in harm's way who are compensated far less? is it -- is it possible that there aren't some patriotic americans who would be willing to serve heading up these organizations to try to get it cleaned up? the primary causes of the collapse our economy, which still plagues us to this day? for decades, the american taxpayer -- mr. president, i ask unanimous consent the article from "politico" be included in the record at this time. the presiding officer: without objection. mr. mccain: for decades, the american taxpayers have been the victim of outright corruption and blatant abuse at the hands of fannie mae and freddie he mack.
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countless warnings over the mismanagement of both fannie and freddie over the years. in may of 2006, after a 27-month investigation into the corrupt corporate culture and accounting practices at fannie mae, the offices of federal housing enterprise oversight, the federal regulator charged with overseeing fannie mae, issued a blistering 348-page report which stated in part that -- and i quote -- "fannie mae's senior management promoted an image of the enterprise as one of the lowest risk financial institutions in the world as 'best in class' in terms of risk management, financial reporting, internal control and corporate governance. the finding in this report show that the risks of fannie mae were greatly understated and that the image was false. during the period covered by that report, fannie mae reported extremely smooth profit growth and had announced targets for earnings per share precisely each quarter. those achievements were
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illusions deliberately and systematically created by the enterprise's senior management with the aid of inappropriate accounting and improper earnings management. a large number of fannie mae's accounting policies and practices did not comply with generally accepted accounting principles. the enterprise also had serious problems of internal control, financial reporting and corporate governance. these errors resulted in fannie mae overstating record income re and capital by a currently estimated $10.6 billion. by deliberately and intentionally manipulating accounting to hit earnings targets, senior management maximized the bonuses and other executive compensation they received at the expense of the tax -- shareholders. earnings management made a significant contribution to the compensation of fannie mae chairman and c.e.o. franklin raines, which totaled --
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franklin raines' bonus totaled over $90 million from 1998-2003. of that total, over $52 million was directly tied to achieving earnings per-share targets which turned out to be totally false. the list goes on and on. mr. president, i -- i would recommend to my colleagues before i go too much further this book. the title of it is "reckless endangerment." it's by gretchen morgenson, who happens to be a columnist and writer for "the new york times," and joshua rosner. it's entitled "reckless endangerment: how outside ambition, greed and corruption led to economic ar armageddon." and i can tell you, in this book, it points the finger directly at fannie and freddie.
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and i'd just like to quote one aspect -- one part of it. "because bonuses at fannie mae were largely based on per-share earnings growth, it was paramount to keep privates escalating to guarantee bonus payments. and in 1998, top fannie officials had begun manipulating the company's results by dipping into various profit cookie jars to produce the level of income necessary to generate bonus payments to top management. federal investigators later found that you could predict what fannie's earnings-per-share would be at year's end almost to the penny if you knew the maximum earnings-per-share bonus payout target set by management at the beginning of each year. between 1998 and 2002, actual nerngz the bonus -- earnings in the bonus payout target differed only by a fraction of a cent, the investigators found. investigators uncovered documents detailing the tactics used by leanne spencer, a
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financial official at fannie, to make the company's $2.48-per-share bonus target. that year, fannie mae earned $2.4764 per share. in a mid-november memo to her superiors, spencer forecast that the company was on track to earn $2.4744 per share, just shy of what was needed to generate maximum bonus payments to executives. she described various ways she could juice the company's profits if need . it goes on and o -- profits if . " it goes on and on and on. that month, thomas fides, the vice president for human resources, warned a swath of top managers that earnings growth was coming in weak as the year end approached. you know that as a management group member, you help drive the performance of the company, nides wrote in a memo. that's why your total compensation is tied to how well fanniema mae does this year.
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in other words, he was jacking them up, telling them that they got to cook the books some more. the memo achieved the desired result. fannie mae executives wound up exceeding their target by accounting properly for low-income housing tax credits the company received. the result -- 547 people shared in $27.1 million in bonuses. this was a record. the bonuses represented 0.79% of fannie mae's after-tax profits, more than ever before. the list goes on and on. by the way, executive pay at fannie mae was a well-kept secret and the company successfully blocked some in congress, such as representative richard baker of louisiana, from receiving information about salaries and bonuses paid by the company. it was only after fannie was caught cooking its books that details of its lavish pay came out. the accounting fraud at fannie went undiscovered until 2005,
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when an investigation by ofheo unearthed it in a voluminous and intensely detailed 2006 report, ofheo noted that if fannie mae had used the appropriate accounting methods in 1998, the company's performance would have generated no executive bonuses at all. though highly-kept secret at the time, johnson's bonus for 1998 was $1.9 million. investigators returned it later emerged that the company had made inaccurate disclosures when it said johnson earned a total of almost $7 million in 1998. in actuality, his total compensation that year was more like $21 million. and none of these people to my knowledge has ever been punish punished. evermenever. so it's one of the great scandals of our time. it's one of the great scandals of our time, what has happened. what steps remember taken by
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congress at that time to punish fannie mae? none. according to published report, including fannie mae's own news release, daniel mud, the president and c.e.o. of fannie mae at the time, was awarded over $14.4 million in 2006. and over $12.2 million in 2007 in salary, bonuses and stock, and fannie mae continued their risky behavior, successfully posting profits of $4.1 billion in 2006. well, i fully understand that the corrupt individuals who cooked the books in order to meet the targets necessary for maximum executive compensation are no longer in place at fannie mae and freddie mac. for all that, we can be thankful. but let's be clear about one thing. the structure for executive bonuses remains in place. there's still an incentive for executives at fannie mae and
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freddie mac to meet certain goals in order to be rewarded with millions of dollars in bonuses. i'm not suggesting that either one of these g.s.e.'s is using fraudulent accounting methods, but the taxpayer remains at risk if an unscrupulous individual or group of individuals decides to put their own self-interests above that of the american people. it happened at fannie and freddie before and it can happen again, and it's unconscionable. it's been proven time and time again that fannie mae and freddie mac are synonymous with mismanagement, waste, outright corruption and fraud and their federal regulator had the audacity to approve $12.8 million in executive bonuses to people who make $900,000 a year. this body should be ashamed if we let this happen again, especially in these tough economic times. every day more and more americans are losing their jobs
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and their homes, and we're allowing these people to take home annual salaries of $00,000 and -- of $900,000 and bonuses of $12.8 million, all while they ask the taxpayers for $ billion more -- for for $6 billion more in bailout money. many of my colleagues sent a letter to edward demarco, the acting director of the fhfa, asking for his decision to award bonuses at executives at fannie and freddie. in his response, mr. demarco echoed what is becoming an increasingly popular theme used to defend the big payouts. essentially, mr. demarco argues that in order to get the best people in place, we need to pay them outrageous amounts of taxpayer dollars. i don't buy that argument. it's ridiculous to tell the american taxpayer, look, we lost hundreds of billions of your money so we need to pay these smart guys millions of dollars of year -- your money so that we
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don't lose the rest of your money. the american people are smart enough to see through that sham logic and they are angry. as i previously stated on the senate floor, i find it hard to believe that we can't find talented people with the skills necessary to manage fannie and freddie for good money, $900,0 $900,000, without the incentive of multimillion-dollar bonuses. there are many examples of intelligent, well-qualified, patriotic individuals working in our federal government who make significantly less than the top executives at fannie and freddie with just as much responsibili responsibility. for example, the basic pay for a four-star general is $179,700, including basic allowance for housing, that figure rises to $214,980. chief justice roberts makes
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$223,500 a year. and president's cabinet members make $199,700 a year. now, today -- now, today, mr. president, to add a little insult to injury -- or a lot of insult to injury -- here's today's story from "npr." freddie mac, a taxpayer-owned mortgage giant, has placed multibillion-dollar bets that pay off if homeowners stay trapped in expensive mortgages with interest rates well above current rates. now, this is the same outfit that we're paying all this money to in these bonuses, so they decided to bet against the homeowners of america. freddie began increasing these bets dramatically in late 2010. at the same time that the company was making it harder for
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homeowners to get out of such high interest mortgages. no evidence has emerged that these decisions were coordinated. the company is a key gatekeeper for home loans but says its traders are -- quote -- walled off from the officials who have restricted homeowners from taking advantage of historically low interest rates by imposing higher fees and new rules. freddie's charter calls for the company to make home loans more accessible, its chief executive charles haldeman jr. recently told congress that his company is -- quote -- helping financially strapped families reduce their mortgage costs through refinancing their mortgages, but the trades uncovered for the first time in an investigation by pro publicca and by npr give freddie a powerful incentive to do the opposite. highlighting a conflict of interest at the heart of the company. do we really need this company around? can't we find something better?
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in addition to being an instrument of government policy dedicated to making home loans more accessible, freddie also has giant investment portfolios and could lose substantial amounts of money if too many borrowers refinance. freddie's trades while perfectly legal come during a period when the company was supposed to be reducing its investment portfolio, according to terms of its government takeover agreement, but these trades escalate the risk of its portfolio because of securities freddie has purchased are volatile and hard to sell, mortgage security experts say. the financial crisis in 2008 was made worse when wall street traders made bets against their customers and the american people. now some see similar behavior, only this time by traders at a government-owned company who are using leverage which increases
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the potential profits but also the risk of big losses and other wall street stratagems. more than three years into the government takeover, we have freddie mac pursuing highly leveraged, complicated transactions, seemingly with a purpose of trading against homeowners, says mayor. these are the kinds of things that got us into trouble in the first place. mr. president, you can't make it up. so it seems to me that the first thing we ought to do as we -- as i and others have recommended is get these g.s.e.'s on the track to going out of business as quickly as possible. their track record is outrageous. the second thing, let's not give millions of dollars in bonuses to people that are betting against the homeowners of america. mr. president, i yield the floor. a senator: mr. president. the presiding officer: the
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senator from vermont. mr. leahy: mr. president, i will shortly be offering as an amendment an amendment to the substitute on behalf of myself and senator john cornyn, and i would ask consent in a moment to suggest the absence of a quorum, but upon the -- dissipating the absence of a quorum that i be recognized for up to three minutes. the presiding officer: without objection. is there objection? so ordered. mr. leahy: i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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mr. leahy: mr. president. the presiding officer: the senator from vermont. mr. leahy: i ask unanimous consent the call of the quorum be dispensed with. the presiding officer: without objection. mr. leahy: mr. president, i am soon going to offer an amendment to the substitute. i am going to offer it on behalf of myself and senator cornyn. i hear the senator saying that with the public's opinion, that congress at a -- with congress at a low point, we need to take action to restore public confidence. i think our amendment does that, closes loopholes in the laws of
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a lot -- to allow corruption to escape accountability. i believe we have to provide investigators and prosecutors the tools to provide officials the -- to hold accountable when they act corruptly. this agreement will strengthen and clarify key aspects of federal criminal law, to help investigators and prosecutors attack public corruption nationwide. i should note, mr. president, the senate judiciary committee has reported this bill with bipartisan support in three successive congresses, and i would note that the house judiciary committee under a republican chairman repeatly reported a companion bill and did so unanimously.
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every republican, every democrat voted for it. so i believe it's time for congress to pass serious anticorruption legislation. we have demonstrated that this is something that could bring both republicans and democrats together, and we ought to pass it. the public corruption erodes the trust the american people have in those who are given the privilege -- and it is a privilege -- of public service. too often loopholes in existing laws have meant the corrupt conduct can go unchecked. and the stain of corruption spread to all of the government that victimizes every american by chipping away at the foundation of our democracy. the amendment, i believe, will help to restore confidence in government by rooting out criminal corruption.
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it includes a fixed -- a fix to reverse a major step backward in the fight against crime and corruption. in skilling versus the united states, the supreme court sided with a former executive from enron. it greatly narrowed the honor services fraud statute. a law that has actually been used for a decade in both republican and democratic administrations as a crucial weapon to combat public corruption and south dealing. unfortunately, whether intended or not, the court's decision lays corrupt conduct unchecked. most notably the court's decision would leave open the opportunity for state and federal public officials to secretly act in their own financial self-interests rather than in the interests of the public. the amendment that senator cornyn and i have put together
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would close this gaping hole on our anticorruption laws. it includes several other provisions designed to tighten existing laws. it fixes a gratuity statute. to make clear that while the vast majority of public officials are honest, those who are not cannot be bought. it reaffirms the public officials may not accept anything worth more than $1,000, other than what is permitted by existing rules and regulations, given their official positions. it also appropriately clarifies the definition of what it means for a public official to form an official act under the bribery statute. it will increase sentences for serious corruption offenses. it will provide investigators and prosecutors more time to pursue these challenging and complex cases. it will amendment several key
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statutes to clarify the application of corruption cases to prevent corrupt public officials and their accomplices from evading prosecution based on legal ambiguityies. if we're serious about addressing the kinds of egregious misconduct that we have seen in some of these high-profile corruption cases, then let's enact meaningful legislation. let's give investigators and prosecutors the tools they need to enforce laws. it's one thing to have the law on the books. it's another thing to have the tools to enforce it. so i hope that this will be -- this bipartisan amendment will be adopted, and, mr. president, i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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mr. leahy: mr. president. the presiding officer: the senator from vermont. mr. leahy: mr. president, i ask consent the call of the quorum be dispensed with. the presiding officer: without objection. mr. leahy: mr. president, i send to the desk an amendment to the substitute posed -- proposed by myself and senator cornyn and ask that it be appropriately -- the presiding officer: without objection, the pending amendments are set aside. the clerk will report. the clerk: the senator from vermont, mr. leahy, for himself and mr. cornyn, proposes an amendment numbered 1483 to amendment numbered 1470. mr. leahy: i ask consent further reading be dispensed with. i thank the chair and i yield the floor.
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ms. collins: mr. president. the presiding officer: the senator from maine. ms. collins: mr. president, i know of no other speakers who plan to come to the floor before we are scheduled under the previous order to recess at 12:30, so i would suggest that we might want to move up the recess time by a couple of moments. the presiding officer: good suggestion. under the previous order, the senate will stand recessed until
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>> i have an alarming thought about all of this. in some ways the discussion about cyber mirrors a bit the discussion we used to have about terrorism back in the '80s and the '90s. there was a great deal of difficulty coming to a national consensus about what to do about it until we
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had 9/11 which then crystalized everything and we knew what to do and the nation moved forward. we haven't had that kind of event in cyber yet. we imagine it. we talk about it. the attack on zappos. the attack on stratforewhere i lost my credit card. the only good thing i think a few more of those there will be growing public awareness this is a serious vulnerability that i think will then overcome some of the private sector reservations about working with the government on this >> up next, former rnc chair ed gillespie gives the keynote speech to the hispanic network inspiring action conference. this is the third sufficient conference of the organization since the official launch last january.
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the advocate group is a group focused on engaging the hispanic community on policy issues. this conference was held outside of miami at the doral golf resort and spa. this portion is about 40 minutes. >> good afternoon, everyone and thank you for joining us here today. my name is brian walsh and i'm the president of american action network. as a tip of the hat to jennifer who is slowly but surely to speech spanish. [speaking spanish] [applause] to take a very brief moment to look back at all that you have accomplished, one year ago hln was inaugurated here in miami. one year later with have twice as many participants. we attracted presidential candidates. we cosponsored a presidential debate and due to individuals, it is due to leaders like yourselves in neighborhoods and communities. we're stepping forward to fill an appetite and to be a
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voice within your community. for the hispanic community within the center right movement. it truly has been an honor to participate in this, in this project. it's truly been an honor to see the energy and excitement that has come not from us to you but to the community towards hln and the appetite that was there and how successful it's been in such a short period of time. i have the incredible honor introducing our next speaker who will be hear to give remarks and answer some of your questions. ed gillespie is one of our country's top communication strategists. his long career of success in business and politics and government makes him one of the best and brightest in the field today. he served as counselor to president george w. bush where at the white house he helped managed a series of historic events include, including the 2007 surge of troops in iraq, the response of the financial crisis in
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2008, and the peaceful transition of presidential power in 2009. he also served as the chairman of the republican national committee and today he is the founder of ed gillespie strategies and chairman of the republican state leadership committee. with that please give me a warm welcome from south florida to our next speaker, ed gillespie. [applause] >> thank you. thanks. >> host: brian so much. it is great to be with you. i want to thank the hispanic leadership network for giving me this opportunity to speak here today about the important role and influence that americans have of hispanic descent will play in this year's very critical presidential election. i mostly want to thank them putting four hours between my remarks here now and senator rubio's speech this morning. if you're from alabama you know there is a saying there you don't want to be the coach that follows bear bryant. you want to be the coach
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that is the coach that follows bear bryant. wow that was a great speech. our cause need as lot more marco rubio's. that's one of the things i want to talk with you about today [applause] at the republican stayed leadership committee which brian mentioned i chair we launched the future majority project. it is a important long-term effort for conservatives to help eelect more people in office and increase our majority status and i think many of you can help today and i want to share with you what our goals are. it is a three-pronged effort that includes increasing our share of the vote with women, young voters and americans of hispanic descent. now i want to focus on the last one i mentioned which is actually the first priority of the future majority project. we seek to recruit 100 hispanics to run in this election cycle for statehouse and senate seats all around the country. ordinarily the rsl.
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consider focuses resources on flipping legislative chambers from democratic control to republican control or keeping republican control where we have a fight on our hand but in this instance we're going to be active in every state, in all 50 states, helping to elect hispanics. presently there are, republicans hold 3978 of the 7328 state legislative seats across the country. that is about 54% of state legislative seats in america. but only 45 of those nearly 4,000 republican state legislators are hispanic. now we've got some real stars on our side. we saw one this morning in senator rubio. governors martinez and sandoval. congressman, canseco, labrador and herrera and butler and others. we need to build success on elected leaders of hispanic descent by electing more of
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them because we know voters tend to relate to candidates they can identify with and more latino elected officials will help us convey a message of economic growth and opportunity to the fastest growing segment of our population and that will help increase support for conservative policies solutions. now i say that as an irish catholic who has seen my fair share of irish catholic politicians in st. patrick's day parades and knights of columbus halls and obviously anglocandidates need to communicate with hispanic voters too but hispanic officials can help us grow our majority and state legislatures are the pipeline for future governors and attorneys general and senators and members of congress. u.s. senator marco rubio is former florida house speaker marco rubio. and i think everyone in this room understands why this effort is so important. we know that this is the fastest growing sethment and
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that we have to increase our share of the hispanic vote but i want to highlight a few key data points in that regard. in 2000 george w. bush got 55% of the white vote in this country and the election was a dead-heat, a 50-50 split decided by a few hundred votes here in florida as some of us remember very well like it was yesterday in some cases. eight years later, john mccain got 55% of the white vote and lost to barack obama by seven percent an points. of that drop-off was due to the fact that the hispanic vote declined from 13 % points, from 44% that george w. bush got in his re-election in 2004 to only 31% for senator mccain just four years later. but here's the point we need to think about. in 2020 only two presidential election cycles away, not far in this span
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of political time, if the republican nominee for president gets the same percentage of the white african-american, hispanic and asian-american vote that john mccain got in 2008, a democrat will be elected to the white house by 1 percentage points. the fact is that -- 14. according to the 2010 census, 50.5 million people in america, one out of every six, are of latino origin. in 2012 one in every 10 votes cast will be cast by a latino voter, a record 12.2 million votes according to the national association of latino-elected and appointed officials. if that projection is accurate that will represent and astounding 26% increase in one presidential cycle. so it's not surprising when you consider that over the past decade the number of voting-age hispanics increased 75%. unlike every other
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demographic are not voting at the full strength of their population. what do i mean by that? well, white voters account for 73% of the voting age population and cast 76% of the vote in 2008. african-americans are 12% of the population, cast 12% of the vote. asian-americans, 3% of the population, 3% of the eligible vote and cast 3% of the votes in 2008. hispanics are 16% of the population and account for 9 1/2% of eligible voters but were only 7.5% of the vote in 2008. without a single new person coming to this country from another country, the fact is the his pan -- hispanic vote will increase dramatically the next decade as voting strength population and voting age strength inevitably closes. every month, 50,000 americans of hispanic descent become eligible to vote. so by 2020 this segment of
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the electorate will be a decisive swing vote, available to conservative candidates for statewide and federal offices or an insurmountable obstacle for those who believe in greater economic growth, more freedom and more individual liberty. now public polling shows us that there is room for tremendous growth for conservatives among latino voters. hispanic attitudes towards government and its policies are consistent with republican philosophy on many issues. just yesterday the hispanic leadership network in resurgent republic released the results of a new survey of hispanic voters here in florida. six in 10 believe the country is on the wrong track. six in 10 believe president bam has not -- president obama has not drivered delivered on his 2008 promises. two to one they believe the situation for hispanics is worse not better under
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president obama. nearly 2/3 believe the economy and jobs are the most important issues and an overwhelming 86% are very or somewhat concerned about the federal government's level of spending and debt. a majority believes president obama is a weaker leader than they expected him to be. in the critical state, swing state of florida there is an opening here for us for hispanic voters as well as in those critical swing states of new mexico, colorado, nevada and arizona. hispanic voters will play a pivotal role in the outcome of the electoral college in november. happily on fundamental issues like lower taxation, allowing small businesses to grow and operate free of excessive regulation, fostering family, individual responsibility, homeownership, equality of opportunity rather than outcome, protecting the sayingty of life and reforming education, most americans of hispanic
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descent are aligned with the republican party's principles. in some respects hispanic americans are receptive to a conservative policy message. in 2012, that message could not be more important as this election is a referendum on president obama's liberal policies and his handling of the economy. hispanics share the same anxieties as the population as a whole in this regard. that is very important because 2012 is the most important election of our lifetimes. now i said that in 2004 when i was chairman of the republican national committee and i meant it then. at that time failure to respond to the threat of terrorism would have made us weaker as a nation. of course we still face many threats today but we've taken steps that have made us safer. but now we face another threat in the form of crushing federal debt, punitive taxes, excessive spending and stifling regulations. mandates and government
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intervention in our economy that threaten to lead to future generations of americans a very different country that we have enjoyed until now. a lot of people who voted for barack obama in 2008 thought that they were this voting to change washington. they didn't think they were voting to change america. but that's what they got. a president who wants to in his own words, transform our country. this administration and those in congress who support its agenda want to move us away from our free enterprise system where individuals are free to rise and fall according to their own god-god-given taletns and abilities toward a more centralized economy where millions of decisions made every day by free americans in the marketplace are replaced by hundreds of decisions made by appointed political appointees in washington, d.c. decisions about everything from what light bulbs we can buy to what cars we can drive and what foods we can eat to what health care we can purchase. promise that is the trillion
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dollar obama health care bill would bring down the deficit, reduce premiums and allow people who are happy with the insurance they have can keep it given reality adding to our nation's debt and premiums are going up and everyday people are losing insurance they had and enjoyed. just as the health care bill is driving up the cost of health care this administration's energy policies are driving up the cost of energy. and their regulations on banks are making it harder for businesses to get capital. many hispanics are small business owners and they feel that credit crunch. i spoke just a couple weeks ago with a small bank owner in ten see who told me that for the first time he employs more compliance officers than loan officers. all of that reflects a view from washington and from this administration that we'll all be better off if experts there in the nation's capitol, economists in the treasury department, policy mavens on the president's council of economic advisors, staffers on the house ways and means and senate finance
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committees, could just have even more power to and i'm going to use the president's own words here, to even out the cycles of boom and bust in our economy and to spread the wealth a little. most americans including americans of hispanic descent know that the ups and downs that come with a dynamic market driven economy, even a little frightening sometimes but also understand that that dynamic characteristic is essential to the economic growth that creates the wealth. liberals only seem to want to redistribute. we want understand that the private sector investment is better than public sector stimulus. ambition isn't the same thing as greed and punishing success only results in less success. like most americans, americans of hispanic descent understand that prosperity results from and economy based on creating wealth and not redistributing it. if you truly care about lifting millions of people out of poverty history shows you should support a system of democratic capitalism
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over a government-managed economy. they believe that america is more a source of problems in the world than a force for good in it. they believe that america is exceptional only as president obama himself has said, in the same way the brits believe in british exceptionalism and greeks believe in greek expect alism. hispanic americans understand that the united states of america is not just another country on the u.n. roll call. a world where america is weak, a world is less stable, less stable and more dangerous to us here at home. on situation of life and marriage, latino voters are right of center. understanding a culture that fails to protect innocent life in all its stages ultimately becomes a culture with respect for all fellow human beings is diminished. that families are the fundamental building blocks of healthy societies and institution of marriage between one man and one woman is the foundation of
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healthy families. the principles most latinos embrace are the principles that made our country so great. made america as abraham lincoln called us, the last best hope of man on earth. the genius of our founders as seen in the declaration of independence and the u.s. constitution resulted in a beacon of liberty and opportunity that has drawn freedom-loving people to our shores for more than two centuries. in the mid 18 '40s and '50s during the irish potato famine, what the irish called the great hunger, millions fled that beautiful tragic island for the united states having little idea what to expect on the other side of the ocean but hoping to find survival there. in the galleys of the ships that left dublin, the irish government posted bulletins with the heading advice to irish immigrants. posters read in part, in the united states wealth is not i'd doughized but there is no degradation connected
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with labor. in the most parts of america, does street just youth may follow any occupation without looked down upon and may rationally be expected to raise himself in the world by his labor. i sometimes find myself wondering if the irish government official who wrote those word over 150 years ago had a better grasp on the essence of america than do some u.s. government officials today? decades after the great hunger had subside ad poor 9-year-old boy's father was able to scrape together enough money from working in idaho silver mines to bring the boy and mother and six brothers and sisters from ireland to america. at ellis island, sean patrick gillespie, became john patrick gillespie. in the gritty neighborhoods of north philadelphia he became known as jack. he served his adopted country as an infantryman in world war ii earning two purple hearts a bronze star, a bronze star with oak leaf cluster and silver star in some of the bloodiest
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fighting in european theater. he worked as a janitor with his wife connie. he bought a mom-and-pop grocery store. eventually saved enough money to live every irishman's dream. he bought his own bar. [laughing] jack -- [applause] jack and connie gillespie made their six children the first on either side of the family, the first generation to ever attend college. i'm one of those children, the son of an irish immigrant who came here legally, worked hard, made a better life for himself and his family than he ever dared dream possible and helped make the world a safer, better place. jack gillespie was born in donegal but he died a great american and i am proud to be the son of that immigrant. [applause] we don't want america to become more like the places
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people have opinion leaving for centuries to come here to get away from. places with currencies ruined by too much government debt, economies choked by too much government intervention and happiness stifled by too little personal freedom. we want to continue to welcome people who want to come here to work hard, worship freely and become great americans because that is what makes america so great. i want to thank fred and norm and dug and jennie all those involved in the hispanic leadership network for the american action network and american action forum for the work you do to convey conservative principles especially to those voters who are so receptive to hearing that message and i want to thank all of you for being here today to support those efforts. god bless you, god bless america and thanks for letting me be with you here today. [applause] thank you.
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>> with that i will step out from behind the podium and we've got time for some questions or advice or suggestions. would welcome those so. yes, i'm sorry. we have a microphone moving around so. >> do you know the laws in the state of florida have changed to register voters? and, you have to register your organization in tallahassee for you to have permission to register voters? do you know that. >> i'm not familiar with that. >> that makes more difficult to register supporters. >> i'm for, i believe that, and there is a lot of effort going on this front to not only identify latino voters who share our values and would vote for conservative candidates who believe in free markets and free people. we also need to identify and register those voters. i think that shows those who have a liberal perspective have done a much better job of identifying potential
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liberal voters than we have done of identifying potential conservative voters in the hispanic community. so i'm not familiar with the florida state law but but whatever the law is i do think that those of us who believe in conservative principles have to do a better job of registering hispanics who share our point of view. here. >> mr. gillespie, thank you, first of all. to break it down, essentially right now you're speaking to the choir. i think everyone this room knows exactly where you're coming from and what you've told us. we understand it very well. how do we get that message to other communities? because once you leave miami, once you go north of miami, republicans, conservatives, hispanics are having trouble explaining why they're conservative? how do we get that message to the anglocommunity so they begin to realize the reality of the census and
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everything you've been saying? >> right. i think there is growing awareness there. i sense it. i can feel it in meetings that i attend and groups i participate in. row zaro romanez, is active on our efforts on republican state leadership committee and efforts to elect officials and spread that world. that is part of the point for us to have elected latinos to share our view. it gives them a greater platform to get that message out. i'm a big believer in concentric circles. it starts here at meets like this where there is a preaching to the choir that is done. i think it helps to best talk about these issues in a way that does resonate. we've been doing i mentioned resurgent republic. i would encourage everyone to look at resurgent republic website. with have ongoing hispanic project. whit areas is here. he dade the most recent republican survey. we did a heavy stream of
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data regarding hispanic voters. we did focus group. we try to discern how best we talk about these issues. one of the things we learned and one of the reasons i mentioned the crushing debt because in the latino community with latino voters there is greater sensitivity because somewhere recently or little further back their family has a history of countries where inflation and wrecked currencies was a result of excessive debt and spending. so it resonates there. it is one of the things we learn. it is an ongoing project. we have to push it out in concentric circles. it starts in meetings like this one here today. yes, sir? >> [inaudible]. >> we were told when they were pushing for the affordable health care act that we had to, as a nation, come together and insure the 30 to 40 million uninsured in this country of which
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part of that, i believe was the illegal immigration, illegal immigrant of this country. how do you think that this obamacare is going to impact our future if, if it stays? and if it's not repealed, i know that mr. coleman -- >> senator coleman yes. >> senator coleman made a remark yesterday that said that he didn't believe obamacare could be repealed in its entirety. do you believe that's true and how is that important in retrospect to get every part of it repealed?. >> well, i'm not familiar with exactly what senator coleman said. he is a friend. i have great respect for him. i will share my view which i believe obamacare can be repealed and it must be repealed.
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the fact is that the democrats were able to pass it with a simple majority in the senate senate. there was not a 60-vote ruled that applied to enacting obamacare. by my reckoning there doesn't need to be a 60-vote margin in the united states senate. we can do it under the same rules they enacted it. i believe also we will have 51 republican senators in the senate senate next january to do that. [applause] i believe everyone of them will vote to do so. i think it is imperative. the fact there is a dangerous precedent here. there it is regulation of nonactivity. if you can, if the federal government is powerful enough to say, not just say that we're going to regulate what you're doing when you spend money but we'll regulate you're not spending money, today might be health care. next time might be green energy. if you don't buy green energy, we'll make you buy green energy. that way solyndra wouldn't have gone out of business maybe. and so, you know, i think the precedent is very
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dangerous from a broader philosophical, that expansion of the commerce clause would be, you know, there would be no-holds-barred, no limitations on the federal government going forward. from a more specific perspective, it's clear the effect that this bill is having on, right now on job creation. a lot of small business owners in particular are leery of hiring for incurring the coast of the mandated health care coverage. we are seeing that people are losing their coverage. a friend of mine is a car dealer in harrisburg, pennsylvania. best friend i grew up with. when the bill was moving through congress he called me and said i did the math on this he has 73 employees. they have 30-70 split on health care costs on premiums. i did the calculations and it would be cheaper for me to pay the surtax and dump my employees off my private insurance into the government program than continue to pay their health care. they have got it all wrong. they haven't figured it out
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right. they haven't done the math right. i said they have done the math exactly right. that is what you're supposed to do. they're just pretending it is not the case but that's what they want to migrate people into essentially a single-payer system. we've seen how that works in other countries. so from in terms of individual liberty and in terms of quality of health care, in terms of job creation, it is a unbelievably bad bill and it needs to be repealed, root and branch pulled out of the code [applause] yes, sir? >> hi, i'm from new mexico. >> yes. >> you know, hispanics are a very diverse group as you know. >> yes. >> how do you taylor a message that really connects and speaks to a such a diverse group of people? >> that is really good point. one of the things resurgent
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republic lib did, we had a survey of hispanic voters and a survey of hispanic voters in new mexico, hispanic voters in colorado and hispanic voters in florida. not monolith tick. we said the catholic vote is swing vote which it is. no president has been elected without carrying a majority of catholic voters in this country since eisenhower was able to do it in 1956. ever since then, where the majority of the catholic vote goes the white house goes. so but it's not a monolithic vote. you know, there's german origin catholics in the great lakes region. there is irish catholics like me. i was a democrat like many, i was born in 1961, the son of, 1961 the year john f. kennedy was sworn in as president of the united states. in new jersey, son of irish immigrant. they stamped democrat on my birth certificate which is case with a lot of hispanic voters today. but i realized at the time those were not my values.
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my point is we have to communicate to the different segments of the hispanic electorate differently. hispanic voters in new mexico are more liberal than hispanic voters in florida. at the same time, we have one of the most popular governors in the country today in suzanne ma martinez, a republican at 65% approval rating in new mexico. so we can get those votes [applause] and but you're right. the truth is, elections are about targeting votes and targeting message and micro targeting. radio ads in new mexico may be a little different than radio ads in miami. facebook ads in new mexico may be a little different than facebook ads in cole. it would be a mistake to assume that there's, you know, that we shouldn't be targeting. that said, there are universal principles and values that appeal across not only hispanics of different ethnic origin but across every ethnicity in america whether it is african-american, hispanic
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american, asian-american or irish-american like myself. yes, ma'am? i'm making the mic guy work a little bit here. >> good afternoon. my name my name is elizabeth. my first president i had privilege to vote was ronald reagan which i love. i know no one will ever become as wonderful as he was for us. i am a puerto rican. we have 400, 4 million puerto ricans in the united states. >> yep. >> but in puerto rico 85% or more do get out and vote which is astronomical compare with the numbers they go out in florida. i have been involved in the political arena in florida for 20 years. i have been involved and do run a precinct too. . . i have
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been saying this for years have an opportunity. right now we could spend send four conservative puerto ricans to washington, dc. and i think this is a disservice because here we have been -- our puerto ricans in the island and
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my family giving energy and love and attention especially my brothers and sisters from cuba, our island has been the cradle for many of them that they are today the leaders of this great nation and yet we don't have one puerto rican that representatives our 4 million puerto ricans here and 4.8 million in puerto rico. how can we make that change. >> the point you made to the appeal to the puerto rican voters is true of mexican-american voters, and other voters and we need to appeal to all of them but the puerto rican population is a big population here and voting population in the united states and i do think we have to do a better job. i think traditionally it's been ceded as a democratic voting
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bloc and i don't think we should cede any votes to the democrats. i think we should compete everywhere. we should take our message into the puerto rican community just like we do in the cuban-american community and others and that would increase our share of the puerto rican vote. i know the governor is here this morning. talk about a rising star. and he's fantastic and i think he will help us. i know he came -- i volunteered to be general chairman of bob mcdonald's campaign in virginia we campaigned very hard for hispanic voters in virginia and i think with him again to my point about having elected officials that people can identify with, that's a big part of our ability. i'm not in charge of convention or have a formal role but, boy, i sure wouldn't be surprised to see him speaking somewhere in tampa come august.
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[laughter] >> yes, sir. >> i served in the special forces infantry airborne and i consider myself an american patriot. >> yep. >> and we have a problem with -- that we need to ensure equality. we want equal american citizenship for all. we have american veterans fighting today that can't vote for their president and they're from the u.s. territory of puerto rico, because we got to get this straight. puerto rico under the constitution is a u.s. territory. so my question is, what can the republican party do because the puerto rico question is two. it's a group vote on a status question and an individual rights vote. >> yeah. >> so the republican party is the essence of our democracy is consent of the governed and we should not have a tyranny of a majority over a minority. so what can we do to bring more
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awareness? what can the republican party say we're going to be for one equal american citizenship under the american flag no matter where you reside and, you know, and remember it's a complex issue. so what can we do to do that? >> i'm very familiar. as very complex issue. first of all, thank you, sir, for your service to our country. and the fact is as you know in the republican party platform, there's been a position that supports statehood for puerto rico or the vote for statehood for puerto rico. but it's a complicated issue in puerto rico as well as you know. i'm not prepared to give an answer today but i'm prepared to say it's a very important question and one that we need to focus on and have an answer for. you know, the truth is, the fact that i don't feel like i can give you answer is probably a little revealing in terms of, you know, where republican strategists and others are in terms of a message on that and
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it probably needs to move up and i'm going to do a little bit of research on it, but i'm not comfortable stating a position here because i just don't know enough about it other than the past history of the republican party's platform on it. thank you. i will get that for you. yes, ma'am? >> last question. >> oh, last question, okay. >> thank you. welcome. >> thank you. >> as a former elected official in a community that's not predominantly hispanic, the space center brevar county, i think in regards to what we can do, of course, i'm from the bush era so cottage grove did an incredible job to go after the hispanic community and i think that even those of us who are united states citizens, elected officials, god, family and country but yet when we hear the
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rhetoric of our party, it hurts us because we try to get other hispanics to become republicans and they hear that rhetoric it, makes our job even harder. and i think the folks are shaking their heads, by you being here and sharing that, it means a lot to us so i just want to say thank you from the bottom of our hearts because not only do we want to see hispanics saying it but we want to see those that are non-hispanic that are standing up like the panel that was there before and spoke so eloquently and had the statistics and i'm writing all that information down. and i just want to say thank you on behalf of all of us because that's what we need. we need more folks to go ahead and seek who are respected such as you mr. gillespie and jeb bush. >> well, thank you for that.
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[applause] >> i do think as senator rubio said this morning, those of us in, you know, leadership positions, we do need to be more vocal and more forthright about saying, you know, some of this rhetoric crosses a line and i think it does oftentimes. i do know this, i would venture to guess for every one conservative voice out there that, you know, sounds a little like nails on the chalkboard to some of us in terms of the language that's used around the issue of immigration, there are 20 who believe like i do and senator rubio does and governor bush does and others. we have to understand something as conservatives which is the media is going to put the microphone none of the person who is going to -- have the least appeal to those swing voters. that is the nature of the world in which we live. i used to joke -- i was a republican press secretary for many years for dick armey and for haley barber and for others i always used to say i don't
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believe in reincarnation i would like to come back as a democrat press democrat. it's easy and nice. we need to understand the meaning is going to magnify and amplify anyone most -- who they see as being probably damaging to the conservative principals for which we stand. and that means that those of us who share the approach that we're talking about here today have to double our efforts to get our message out and that we're spreading our word out any way we can. and you're kind to share your kind remarks and i appreciate very much and then i thank you all for being here today and have a great rest of your conference. take care. thank you. [applause] >> okay. wow. none of us have no doubt that we
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have this power. today's conference is a new chapter we'll be holding breakout sessions to become better activists and the most important part is communication. please tell us what you thought of the conference today by commenting on facebook page or joining the conversation. we'll shortly begin our are breakout sessions and we hope you'll stick around. all those who registered and participate in the grassroots advocacy training remain here and that will be with our friend jeb bush, jr. who's a chair of the subpack casino and jenny corn executive director of hispanic leadership network. those joining the media training will move grand ballroom a and
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that is with former u.s. senator and ruben navarette and they will be handling that and then in ballroom c policy training, mastering policies to strengthen america, that's doug holtz-eakin the president, and form congressman eagen and paul conway of generation opportunity. so i hope you enjoy the breakout session this afternoon. before we break please indulge me with one more minute of your attention. i would like on behalf of the hispanic network and staff and entire collaborators and hln chair jennifer corn and jeb bush and secretary carlos gutierrez and senator norm coleman thank each and every one of you for participation in this
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conference. we hope that you feel energized that you've enjoyed the day and stay to the reception this evening and we hope you enjoy the breakout sessions and on behalf of myself, it's a pleasure to do this once again. thank you all for being here. i think we made history today. [speaking spanish] [applause] [inaudible conversations] >> the u.s. senate is in recess right now as senators are attending their weekly party caucus lunches. they'll be back at 2:15 eastern and we expect more work on the stock act which will ban insider
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trading among congress and their staff. more live coverage when they come back on c-span2. >> read the latest from the candidates, get updates from political reporters and viewer comments all at >> this past december the u.s. house voted 303-116 to change a 1988 law that restricts the disclosure of video rental histories without customers' written consent. well, today a senate judiciary subcommittee heard perspectives from the general council from netflix and two online privacy advocates and scholars. the house-passed ball h.r. 2471 would allow netflix and other online video providers to seek
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one-time consent from their customers in order to share rental histories on social media sites like facebook. congress passed the law that currently prohibits this activity after a journalist printed supreme court nominee robert bork's rental history in the washington city paper. this portion is just over an hour. >> we're fortunate to have with us chairman leahy who who is the author of the original video privacy protection act or video privacy protection act. and i understand that i left out alan simpson's role when i touted -- >> that was very important. so i apologize for that. he's a good friend. this law, the video privacy protection act is one of several critical privacy laws that the chairman has written in the senate so i turn it over to the
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chamber. >> i thank you very much. and it's good to see my friend, congressman watt, we together on so many things on privacy act and the voting rights act and i appreciate that collaboration. i should tell chairman franklin and i thank him for his responsible leadership he's done on this issue of privacy. we come at it naturally. i see a smile from a friend of mine in the audience who has probably heard this story modern once but one of the few things i've ever seen written about me in the press and actually framed it was a side-bar in the new york city paper. my wife and i live in a old farmhouse on a dirt road.
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and we had our honeymoon there 50 years ago this summer. and hundreds of acres of land and fields and all that have been enjoyed from the time i was a teenager and they've known me so the whole story goes like this. a saturday morning a reporter in an out of state car sees this farmer sitting on the porch does senator leahy lives up this road. he said are you a relative of his, i said no, i'm not. are you a friend of his? no, not really. is he expecting you? no. never heard of him. we like our privacy in vermont. and the digital age ensuring the right to privacy is critical. i think because it's ever more difficult is our government and businesses collect, store, mine and use our most sensitive personally information for our own purposes, not ours, theirs.
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whether it's sensitive medical records, personal thoughts and feelings. i've worked as so many others on this committee have to ensure that americans' privacy rights are respected. we talked about the video privacy protection act. when i introduced the bill i said it's intended to make us all a little freer watch what we choose without public scrutiny. more recently i've worked a protectionist for a library and bookseller records in section 215 of the usa patriot act. now it's true that technology has changed as the chairman mentioned but justice alito said i think we should all agree that we have to be faithful to our fundamental right to privacy and freedom. today social networking and video streaming and the cloud, mobile apps and other new technologies they've revolutionized the availability of americans' information.
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but they're outpacing our privacy laws. that one of the things we have to think about. so i continue to push to enact the personal data privacy and security act, to create a nationwide breach notification standard. i wanted better combat cybercrime and that's why i proposed an update to the electric communications privacy act. recently some companies that dominate various aspects of cyberspace have announced they want to simplify matters so they can more easily track americans activities across-the-board, to their own financial benefit. but i worry that sometimes when it's simpler for corporate purposes is not better for consumers. it might be simpler for some if we had no privacy protections. we had no antitrust productions
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and we had no consumer protections it'd be simpler for some but it certainly wouldn't be better for americans. and i worry about a loss of privacy because of the claim of benefit of simplicity. privacy advocates like to represent us and both sides of the aisle have serious concerns, serious questions and are looking for information and answers. when dominate corporate issues type a checkout that they may receive and it looks like line a fun new app or service, they may not be presenting a realistic informed choice to consumers. a one time checkoff, it has the all-time surrender of privacy. it doesn't seem like the best course for consumers. and i worry the availability of that storage of information be it corporate data banks also makes this readily available to the government where it has almost unfettered power to
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obtain information with an administrative subpoena so-called national security leaders. i think we need that comprehensive reform. representative mel watt is a thoughtful leader on these issues and it's good that he's here. i'm hearing from many as it is from those from corporate america -- i'm hearing from many privacy advocates about the expressed concerns of the house proposal. a one time checkoff of consent to disclose and mine and sell, sell and share information does not adequately protect the privacy consumers. the house proposal updated a lot does not -- doesn't cover streaming and cloud computing to the extent i'd like. we need to move forward with
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electronic communications privacy act and update the best video privacy protection act. so i'm -- i just want to thank the chairman for doing this. i just want to stress again this senator likes his privacy and i especially don't like it about somebody said we're going to make life simpler if we sell your privacy. >> thank you, mr. chairman. >> we are now going to go to the second panel. thank you again, representative watt. you were the first panel evidently, you're a single person who can be a panel. so if the panel would come forward, i'd like to introduce our second panel of witnesses. david hyman is the general
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counsel of netflix, mr. hyman has served in this role for the past second and has seen the company grow tremendously during that period. prior to joining netflix, mr. hyman was the general counsel of web band an internet-based grocery service. he received his j.d. and b.a. from the university of virginia. bill mcgeveran is an associate professor of law at the university of minnesota where he specializes in information law including digital identity and data privacy. before joining the u he was a resident at -- a resident fellow at harvard's berkman center for internet and society and a litigator in boston. professor mcgeveran received his j.d. from nyu and his b.a. from carlton college in minnesota. finally, i should add that professor mcgeveran was once a staffer for senator schumer back
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in the days in the house of representatives. mark rotenberg is the executive director of the electronic privacy information center where he cofounded -- which he cofounded in 1994. he chairs the american bar association of privacy and information protection and as ted'd -- edit several text tubes and he was counsel to senator leahy where he advised the law that we're here today. he received his j.d. from stanford law school and his b.a. from harvard college. christopher wolf is the director of the privacy and information management practice at hogan levels here in washington. and he's also the founder and cochair of the future of privacy forum and he was the editor and law author in the first treatise
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on privacy law and has authored numerous publications on privacy. he received his j.d. from washington and lee university and his a.b. from bowden college. i want to thank you all for being here today. so we'll start with mr. hyman. >> thank you chairman franken, ranking member coburn, thank you for the opportunity to testify today on the video privacy protection act. my name is david hyman. i have served as the general counsel of netflix since 2002. a time when streaming video over the internet to a smart tv was more the stuff of sci-fi miniseries than the topic of serious consideration in a board room, much less a congressional hearing. how far we have come in such a short period of time. today's hearing is a testimony to the incredibly dynamic and
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engine of our economy. netflix was founded in 1997 as a dvd by mail service. to many, the use of the internet and the netflix website was nothing more than a way to submit orders for physical disk delivery but for netflix we saw an opportunity to use technology in a way that helped consumers to watch the tv and movie shows they loved as well as provide opportunities for content producers and distributors. the popularity of our dvd by mail service grew rapidly. but with innovation deeply rooted in our corporate dna we continued to research and try new and compelling consumer offerings. we were an early pioneer in the streaming of movies and tv shows. and in 2008 we began delivering instant streaming. today more than 21 million consumers in the united states use netflix streaming service on
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more than 700 different types of internet connected devices including game consoles, mobile phones and tablets. and in the last three months of 2011, we delivered more than 2 billion hours of streaming movies and tv shows to those consumers. at the same time, that netflix streaming services has seen an uptick by consumers the world of social media has exploded in popularity. embodied by the growth of facebook, the social internet offers tremendous opportunities for consumers and businesses. netflix believes that social media offers a powerful new way for consumers to enjoy and discover movies and tv shows they will love. in this end we've been offering our members outside of the united states the opportunity to share and discover movies with their friends through facebook platform. while it's early in the innovation process we have seen strong consumer interest in our social application with more than half a million subscribers outside of the united states connected with facebook. unfortunately, we have not
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elected to offer our facebook application in the united states because of ambiguities in the video privacy protection act. under this law, it is unclear whether consumers can give ongoing consent to allow netflix to allow the movies and tv shows they instantly watched through our service. the vppa is an unusual law. unlike most federal privacy statutes, the vppa could be read to prohibit consumers who have provided explicit opt-in consent from being able to authorize the disclosure on an ongoing basis of information they so desire to share. the friction that this ambiguity creates places a drag on social, video innovation that is not present in any other medium including music, books and even news articles. recognizing this, the house recently passed bipartisan bill h.r. 2471 that clarifies consumers ability to elect to share movies and tv shows on an ongoing basis. h.r. 2471 leaves in the opt-in
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standard for privacy for the vppa undisturbed. netflix supports the opt-in standard and believes this approach is workable and consistent with our members' expectations and desires. the vppa singles out one type of data-sharing. instead of grams negotiations for almost 25 years ago into that dynamic information age of the day we would encourage a measured and wholistic review of privacy for the 21st century. one designed to foster continued innovation while balancing the desires and privacy expectations of consumers. such a review will understandably take considerable time and effort and we are ready to assist in the interpret it's our hope the senate will see the right for consumers to opt-in in ongoing sharing under the vppa and quickly approve h.r. 2471. again, i thank you for the opportunity today and i look forward to your questions. >> thank you, mr. hyman.
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by the way your complete written testimony will be made part of the record. >> professor mcgeveran? >> thank you. chairman franken, ranking member coburn and members of the subcommittee and staff, thank you for the opportunity to testify today. my name is william mcgeveran. i'm a law professor at the university of minnesota. my teaching and research focus on internet privacy and intellectual property law and in that context i've written about the video privacy protection act but which i consider a model for privacy legislation more generally. now, unquestionably there are enormous benefits to the online recommendations we get from friends through sources like facebook, or spottify and i myself use social media and those recommendations heavily but the potential problems are serious too as others have noted. in one article i argued that the key to getting that balance right is securing genuine
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consent. that means an individual sent a social message intentionally not by mistake. if we have too many accidental disclosures we undermine the personal privacy matters and the actors of the recommendation, the fact that our friend really wants us to see this movie rather than passively letting us know that he saw and it turns out he didn't like it very much. the vppa is designed to secure that genuine consent. so i'll emphasize three points. first, important interests behind the vppa. second, the fact that amendments aren't necessary to keep up with in this and finally, the problems with h.r. 2471. first, the vppa safeguards important interests as others have noted. why else did a newspaper new york think judge bork's rental history might be interesting in the first place unless it was revealing about something about him. the greatest flaw in the existing vppa is its limitation to video which arises from the historical accident of its
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enactment. unintended disclosure of a users choices of books, music, films or websites can constrain the capacity to experiment and explore ideas freely. if the committee revisits the statute it's viewing and hearing. it's part of the part of the intent of the california reader protection act which took effect at the beginning of the month. in general, the law to protect private access to any work covered in copyright, not just movie. second, the vppa in its current form already allows video companies to implement social media strategies including, if they wish, integration with facebook. now, it's true that the vppa requires opt-in consent every time a viewer's movie choices gets afford to a party and that includes friends and a social network. that's not ambiguity that's clearly what the law says. it's actually easier to satisfy
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those requirements online than off. the statute's authors first of all such as senator laically getting a customer to sign a document with a pen and paper every time in person on the internet by comparison, each time users push the button to play a movie, they could be offered a play and share button right alongside it allowing them to both show the video and post that information in social networks. i think it would be quite radical a electronic format is not written consent under the statute. that interpretation would undermine every click, wrap and i agree button that's on the internet. itself contrary to the esign act and all the case law that i've seen. i think the real is not about technology it's disagreement with the vppa's explicit policy choice to get case by case consent rather than one time authorization. finally, i do want to note that h.r. 2471 has a lot of problems
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and misses some opportunities for reasonable compromise. i'll just note a few. changes to the statute apply to every disclosure, not just those in social networks by rushing to address netflix and facebook it reduces others in settings. by specifically mentioning the internet i'm concerned the bill may for close others by cable and satellite. a provision for withdrawing consent says nothing about how it's supposed to be done. that vagueness may apparently make them to comply to consent but very cumbersome to withdraw that consent. most important the bill passed by the house replaces a robust consent provision with a very weak alternative. there may be other ways to get genuine consent than what's offered in the vppa. for example, what about general authorization with a very shorts
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time limit, say one month and then granular clear opt-out for individual postings? i urge the committee and the bill's supporters to explore those sorts of creative conversations to support vppa in the 21st century without vitiating important protection for individual privacy. thank you and i look forward to questions. >> thank you very much, professor. mr. rotenberg? >> thank you very much for the opportunity to testify today. as you know, there are a few issues of greater concern to internet users than the protection of privacy. according to the federal trade commercial over the past decade it has been privacy and identity theft so the hearing that you're holding today is very important, very timely, and of great concern to a lot of people. i wanted to begin by talking about the purpose and passage of the video privacy protection
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act. as you suggested, mr. chairman, in many ways this was a smart and forward-looking piece of legislation. among the various provisions that congress enacted 25 years ago was one that said that let's not keep personal information longer than is necessary today we have an enormous problem in this country with data breaches, and identity theft and companies keeping information on clients longer than they should. there are strong safeguards that have prevented and protected users of these new services from those types of problems. what the video privacy protection act sought to do was to deal with the new reality in video services. prior to the mid-1980s, as you know, most people watched broadcast television or saw movies. there was very little personal collection of data about individuals' particular movie preferences. and so when the story broke about the access to judge bork's
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video rental records, congress appropriately said we need to put in place some safeguards so that information that businesses were now able to collect. now, the act establishes a strong presumption in favor of privacy but it's not a prohibition against disclosure. individuals always have the right to consent to disclosure. law enforcement has the right under a court order to get access to records in the course of an investigation. and even for marketing purposes, inferring can be disclosed and this is the key provision that i'd like to draw your attention to because there was an important compromise that the congress struck when they were considering the act. when someone happens to be a customer of a video service really should be few restrictions on disclosing that fact and the privacy protection was essentially an opt-out, congress even said that if the company wanted to disclose the fact that a person was introduced in science fiction
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movies or mystery movies or action adventure, companies in those circumstances as well could disclose those facts simply with the opt-out protection. but when it came to the actual titles of movies that would reveal so much about a personal interest and their likes, congress said well, there we need a higher level of protection. that should really be opt-in. and if a person chooses in a particular case to disclose that information, they should be free to do so and the act allows for it. now, i want to say very directly to netflix that this argument that they're making that this law somehow stands in the way with integration with facebook is simply not right. they have the freedom today under the law to note when netflix users are using netflix services this they can go to the next step and talk about the next types of movies their customers are doing.
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what the laws tries to do is establish a line and here's the particular movie that one of our -- one of our users is now viewing. that's where the law says please, no circumstances get opt-in content. i want to make a further point because i actually believe many of the house members who voted for this bill don't understand the consequence of the amendment. it's not just the friend of that individual to whom the fact of the specific movie viewing will be disclosed. it's also to netflix business partners and it's also potentially to law enforcement. because what netflix users is asking to do is provide a blanket consent that gives them the opportunity to disclose specific movie viewing that netflix chooses to. this knocks down the cornerstone of the act. it takes away the key provision
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that was put in place to give users meaningful content. obviously, i don't think this is going to support online privacy and, frankly, i don't think netflix users want this provision. but i do think changes could be made to the act, to modernize it and to update it. i think it should be applied to all streaming services. i think that data destruction provision needs to be coupled to the privacy right of action. i'd also like to see more transparency so that users of the service actually know how their personal information is being used and i think companies should be required to routinely encrypt the data they collect. those types of changes to the act actually would update it, would continue to promote a viable and useful service for many users and i hope it will be considered by the committee. thank you. >> thank you, mr. rotenberg and mr. wolf. >> thank you, chairman franken, ranking member coburn and members of the committee. i'm a privacy lawyer at hogan
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loveliels and i'm a privacy advocate. i won a leading case against the government for violating the electronics communications act. i'm part of the group providing the oecd on the privacy guidelines and i'm on the epic advisory board and i founded and cochaired on the board for members on the board and academia focusing on practical ways to advance privacy. i'm pleased professor mcgeveran is a member of that advisory board. fundamentally privacy is about control. indeed, a principle goal of privacy laws is to put choices and decisions in the hands of informed consumers. with the advent of video streaming and social sharing, the video privacy protection act stand -- today stands in the way of consumers exercising exercising control and limits their choices and even limits -- vppa was designed to prevent prying into people's video rental history. the purpose of that law was not to stop people from sharing
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information about the videos they watched or to dictate how they share it was it was to give choice to the consumers on how to share their video watching information in 1988 when the vppa was enacted no one dreamed of streaming and video sharing when that preinternet law is applied to online video and social media it can be read to frustrate the choices of consumers to authorize the disclosure on an ongoing basis on the streaming movies they watched online. for many people i'm sharing and media is how they shape their online identities and how they share ideas. facebook users commonly utilize a one time authorization, a durable sharing option to share a wide range of information with their friends. but when it comes to sharing their online video experiences, the law gets in the way. take a person who's an avid video watcher watching 100 short videos per week she wants to
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share every video she watches with her friends just as she shares every song she listens to on spotify and she shares every item she reads online on the "washington post" for a facebook social sharing app. but current law suggests she's is not fit to make the frictionless sharing decision with respect to videos she watches. should this video file have to opt in 100 times per week? does making her do so serve any purpose other than to annoy her and take needless time? the constant legally required interruption to her online experience harkens back to the day when pop-ups had to be clicked on to proceed online. our frequent video viewer should not be given the -- should be given the opt-in choice to share all of her viewing experience if that's what she wants. in contrast, the restrictions fair to say vppa there are no legal restrictions on her ability to socially share every ebook she reads. she easily can share the fact that she read the book entitled "the godfather" but she can
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share she saw the movie godfather. not everyone wants to share their viewing experiences with their friends online and they don't have to share. and if someone prefers to share their video watching experiences on a case-by-case basis he or she can do manually just as they stories they read on "washington post" on facebook rather than choosing the automatic sharing option. similarly, a person who chooses to share on a continuous basis can disable the share function before watching a streaming video that he or she wants to exclude from online posting such as the yoga for health video that senator franken referenced. in order to clarify the uncertainty of the language in the vppa on disclosures, i support an amendment such as h.r. 2471 allowing durable sharing choice for consumers which in turn will permit frictionless social sharing. i agree as a privacy best practice the durable price option should be opt in and presented prominently separate and distinct from the general privacy policy and the terms of
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use of an online service. that is genuine consent. i join the center for democracy that it will not undermine the fundamental purpose of the vppa. even though some senators personally may feel that sharing all the movies one watches is to use a phrase not heard much anymore, tmi, too much information, people should as a matter of free expression be able to share as they choose and companies should not face legal penalties when providing them with that choice. as governments around the world including our own consider ways to improve their privacy frameworks, there are big decisions to be made as representative watt pointed out in his presentation. starting a legislative process in privacy protection in which lawmakers decide case by case what information and by what means consumers can share is ill-advised. in contrast a amendment of the vppa to permit few user choice and control stilts squarely and the control a privacy framework one that empowers consumers. thank you for the opportunity to appear here today. i look forward to hearing your
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questions. >> thank you, mr. wolf, for your testimony. let me ask -- start with professor mcgeveran, i want to make a few things clear about what this bill does and does not do. i talked a little in my opening statement -- or about what the amendment does and does not do, about what the video -- i talked about what the video privacy protection act does, i want talk for a moment about what it does not do. a lot of people have been saying that the video privacy protection act actually prohibits people from sharing their viewing habits on social networking. in fact, one article said that, quote, an antiquated 1988 bill called the video privacy protection act forbids the disclosure of one's video rental information even if the renter's
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okay with the disclosure. is that right, professor mcgeveran? does this law prevent -- and i'm talking about the vppa, prevent video companies from integrating into facebook other social networking sites if the user wants them to? >> no, it's not right, senator. the underline -- i'm sure it's called antiquated but the statute requires consent every time but as i mentioned in my opening statement, that can be done simply by saying, here's a button to press when you play the movie because presumably you have to press a button to play a movie and next to it is a button to both press and share. you have to be asked every time you see a movie online that seems relatively toes effectuate? >> it would be easy to say i can share. >> that's right. >> mr. wolf talked about -- it would be really easy to disable
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the sharing, but is there anything in the amendment that says how that would happen? could an online video company one less scrupulous than netflix just have it really hard is there anything in the law that would prevent them from making it almost impossible to figure out how to disable it? >> so in the house bill the way it's set up now it says you could enable consent until you took it away. but there's nothing in the bill that gives any requirement business how that would be done. mr. wolf mentioned some best practices. you know, i think a scrupulous company would make it easy. but this law is not only going to apply to companies that we believe are going to do the right thing and it does not -- the company could have no button or access anywhere on its website to do this. it could perhaps have no explanation on its website that
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you had the right to do this. and it would be up to the consumer to figure that out and the house bill requires that kind of arrangement? >> i want to make it clear, to opt in sharing a video, about what movie you're watching would be no more burdensome than just -- than just watching the movie itself? >> under the current law. >> press one button, okay? however, disabling your the overall consent, watch everything could be impossible to find? >> under the house bill? >> that's right. >> mr. rotenberg, do you agree with that? >> i think it's a very important point, senator. what professor mcgeveran has pointed out is that there are innovative ways to allow individuals to click, you know, play and share. there's the integration and there's the disclosure or to simply click play which is -- i
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just want to see a movie. i don't need to tell the world about it. but the point you're making which is of particular concern to us under the house approach once you basically have play and share stuck, that button setting, it may be very difficult to unstick because there's nothing in the proposal that would make it easy to withdraw the consent. >> okay. thank you. mr. hyman there is no company that better exemplifies the promise of streaming than netflix. netflix introduced its streaming in 2008. today 90% of netflix 24 million subscribers have streaming subscriptions. only 45% have dvd subscriptions and that number is dropping. in fact, if you look at about us, the about us section on netflix website, the word dvd doesn't appear once. it's all about streaming and for good reason because that is the future of video. i mention my opening statement that there may be some
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disagreement as to whether or not streaming video companies are covered by the video privacy protection act. mr. rotenberg suggested in his testimony that it would be helpful to change language in the video privacy protection act to confirm that it does, in fact, covering streaming companies. mr. hyman, would netflix support doing that? >> mr. franken, netflix would probably not -- we wouldn't support that. i think the issue for us is really one of, what is video in the future and how do you think about that in the internet age? video embedded into news stories, does that become a news story or is that streaming video? music videos, is that music or is that videos? books, you know, i recently read a book called visit from the goon squad. it's a very good book,
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interestingly it uses in there texting. it has a powerpoint presentation you can imagine in the future that books will incorporate video does that now mean that's covered by the vppa? so i think we have a host of issues relative to what is video in the future and so just extending the video privacy protection act into the internet raise ashost of issues and i think there's a host of other players that need to be involved in that. so, again, as we mentioned in the testimony, a holistic approach and a comprehensive approach would be one that netflix would support and be involved in but merely taking the vppa and saying it applies to streaming, i think opens a whole host of issues that need to be carefully addressed. >> would anyone care to address that in terms of i don't think this amendment is comprehensive at all. you raise a lot of great issues
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about this but it seems to me to say that since the vppa applied to what we think of as movies, right, movies are going to be streamed. they're going to be. so that this law -- it seems like that you need to apply streaming to this. i'm troubled by your excluding -- trying to exclude streaming at all. anyone have anything to say about that? >> well, mr. chairman, i think perhaps the advocates of that approach are drawing the wrong line. i mean, the video privacy protection act wasn't trying to regulate technology. it wasn't saying we'll treat video rental cassettes in one way and another one in a different way. it says similar materials should be treated in a similar way. what the act is trying to do is regulate the use of personal identifiable information and the reason you need to do that in
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the digital world because when you move from broadcast of television and movies to this one-to-one service operation these companies are collecting a lot of personal information about their customers and so what the law tries to do is to say if you're going to collect all that data then you need to protect and i think the other point that should be brought out as we think about these new techniques for delivering video is that companies today are collecting a lot more information than they did 25 years ago and so i would think that the inclination at this point in congress would actually be to strengthen the law recognizing how much more information is collected. >> well, thank you. we'll go to another round. i've run over my time so he we'll go to the ranking member, mr. coburn. >> first of all, let me thank you for your testimony. i learned a lot, from what you had to do. and i'm prone to agree with the chairman on his concerns about the bill as i look at it.
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and i really don't see a big difference from granting permission one click at a time to a blanket consent, but i also think prudence in terms of protection of privacy ought to be the thing that ought to guide us. there's no question netflix, with their policy throughout the rest of the world that's not available here to online consent for that gives them an asset, my asset, my privacy asset that i readily give to them if i'm one of those that grants a blanket consent somewhere else out of this country where i'm giving them something of value that they can use to make money off of. and i'm not sure -- i'm torn between whether we have the
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right to tell somebody whether they can grant a blanket consent or not. i don't know that's our role. but i know it's our role to be concerned about the ultimate privacy protection individuals deserve. i would go back and i would ask the professor if he would give us a little further dissertation on what he thinks or means by the word "genuine consent." >> thank you, senator coburn. and the idea behind genuine consent it's thought out. it's intentional. we're helping a consumer, a customer to most the information that he might want to post. i might have more sympathy in changing the existing vppa if i thought it did, in fact, make it very difficult for people to do that because i think that recommendations of movies to our
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friends are really valuable. i learn a lot about movies i'd like to see by hearing word of mouth from my friends. but as i mentioned before, what we have on is the capacity to make it very easy to make a decision each time from the user, yes, i do intend to share this information now and the ability to say it for all movies in advance -- we're not actually inconveniencing the user very much in an era where you're going to have to push just one button or the other. i would say genuine consent is making sure that it's intentional. >> when i go through dallas airport and use dallas' wifi, every time is i consent, i agree to their terms. how many of you in this room have ever read that, three pages of very fine print saying you agree to consent. >> i have but that's my job. >> you're a rarity. >> i am. >> and so the fact is what you're saying is, what's wrong
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with making a considered judgment each time? >> exactly. >> senator, i think you pointed out the problem with that. when consumers are presented with choices over and over again they tend to tune them out and they will ignore them and they will have no meaning, whatsoever. they'll just click through it to get through the function that they want to exercise. >> well, let me bring you back to this point. if the question that comes up on my ipad is, do you want to share this information through your social media? and i have to say yes or no. that's all that's going to be required for netflix to put up do you want this shared. you have to make a decision. that's a one-line statement that's very different. i'm looking at a movie an arnold schwarzenegger that my wife hates and i love the action to
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them. i want everybody to know i'm watching arnold schwarzenegger. and i'm going to -- i'm going to have -- it's one sentence. i'm going to have to make that decision. why is that not protecting the rights rather than blanket an, oh, i forgot about it oh, i'm hung over from the night before and i already granted and i punched a button on something i really don't want shared. the question is, should we err on the side of privacy? or should we air on the side of commerce? and that's the real rub here. >> right. that's the thing we have to decide. >> i actually don't think that's a choice. if a consumer wants to share everything on their facebook page as many do as they share every article they share on the "washington post," every book they read, every song they listen to, it's not a choice you or i might make but a law that takes away that choice really ignores that there are people who want to do as long as they are informed that there's a consequence to do that and i
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agree with the professor that the opportunity ought to be as easy as it is to opt in, then i really don't see how it's the business of congress to dictate how and when people share. we're talking about letting today but we have no idea what the sharing techniques will be 20 years from now. and i'll leave this to mr. hyman but i understand there are some devices that someone can access netflix through or you can't have that button or it's not easy to have that kind of button that you're talking about >> that's fair. the point is there is a rub. and the argument isn't simply that we're going to take away somebody's right to share. and it's not big brother. i'll go back. i believe the decision is between protecting privacy and promoting commerce and i think we ought to be able to figure out how to do both. >> i get back to my fundamental
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point and privacy is giving people the choice to control their information and who see it is and how it's disclosed. >> there's no limitation to that choice if i got to make that choice each time. you're still giving them the choice. we had reference to the testimony that some think that the ability to use spotify right now ought to have a choice right now. is that not true. did i not get that statement from your statement, mr. mcgeveran? >> spotify is not set up in a way that would be compliant with the vppa if it were video because your scroll of songs is sent out to all your friends automatically. >> yeah. but the point is, is was it not your inference that you thought maybe people ought to be making decisions on that as well? >> same thing, you press a play button for a song you should be making a choice time by time whether that's something that goes out. >> so the question is how big of a choice do you make and whether
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you reconsider it? the question i would have, technically is if i opt in for all of it, each time netflix brings me a movie, do i have the option to optout of that? in other words, do i have a default button that goes out? >> i think the optout option ought to be easy but, you know, there are people who have webcams and they leave them on all the time. and some people think that's ill-advised. they're oversharing. it invades their privacy. imagine a law that congress passes that says the webcam as a matter of law will be turned off once every two hours and you have to make a choice to turn it back on. that has never been the business of congress to tell people how they publish, how they share and with whom they share. privacy is about allowing people that choice. >> again, i don't see say your arguments don't carry large weight. i'm just saying in terms of effectuating the protection of privacy, how are we going to do that. let's say we're going to have an
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opt-in, where's the details on the optout? >> i agree. >> it's not in there. >> that needs to be specified. but i caution the slippery slope of every kind of information and every kind of technology in terms of how people share. >> what we're seeing you get to make a choice. but only the choice you want them to make, not the choice that is available as other information. >> there's two choices, opt in or opt out. the point is you still get to make the choice with your privacy. and i think there's a legitimate concern if you opt in, love the same presence and available information to opt out so the question i would have of netflix, if you have this or where you have it in europe, does every movie have an opportunity to opt out? >> in the current implementation in europe there's an optout don't share opportunity. >> every time? >> as mr. wolf point out,
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certain devices because technologically don't support that. it's not available on every device. it's available on every computer on the device but you can unshare afterwards but the implementation start the movie and the presumption of sharing and there's a don't share button that you can collect afterwards, right when the movie starts, anytime you deal with a movie you can elect to not share and then after the movie is displayed on facebook and you can adjust your setting with netflix to unshare that. there's sharings on the facebook side. >> my question is what's the difference between an unoptout to share optout. one you're going to share all the time and you're making a decision each movie, unshare or unshare. >> one is opt-in and one is out-out. >> the point is, the decision of privacy is it still made individually on every movie that they sent downstream. so what's the difference of
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having an opt-in or opt-out. the feature is they have to have the same thing. >> it doesn't have to be a argument because i don't think it should be a matter of law. >> that's our implementation of h.r. 2471. we've done that because we believe that's what consumers want. i think the issue for us at the highest level is really an informed consent. i think most everyone on this panel agrees i think philosophically on making sure that consumers understand what information they are disclosing or how their information is being handled. so at the high level i think we are all coming to it from the same approach. i think there is a philosophical difference that in some way you highlighted on is it opt-in or is it opt-out? how does congress control the way in which consumers can share? or are available to share. the presumption that we're trying to advocate for in connection with supporting h.r. 2471 is that it's really within the consumers control to elect
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to do that if they so desire. it's an opt-in mechanism and it's one that they should be able to get informed consent. i think there's a question whether or not consumers can ever give informed consent. on our side i think we would take the position, yes, consumers can give informed consent and under the legislation there's a specific opt-out so it's not buried in some terms of use which we're in support of. so >> but privacy is so important. and if everybody at the table supports that, what's wrong with having the reminder that you're sharing your privacy? if it's that much of a value. if personal privacy rights are that important, what is wrong? with having a reminder that you're giving away your privacy right? if it's a virtue to be protected your privacy, then what is wrong
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there should be a reminder that you're giving away your privacy here. what is wrong with that? >> there ought to be reminders and government ought to support education of consumers of cybereducation of kids who tell them what harm they might do themselves online by sharing tmi. but one reminders one would need every day would be in the thousands. >> i don't need any reminders because i don't share anything. >> you're sharing your ideas right now. >> but the point is i have to under the ethics law fill out forms at the end of the year and i have to get that and there's things i have to do. if privacy is of that value and you value that value of the privacy, what is wrong with us saying you need to have a reminder and, me, the chairman, a 12-year-old that you need to have a prompt to say you're giving away your privacy. >> so i can imagine someone opening up their mobile phone
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and they're about to talk in a place and there's a pop-up that you're in a public place and click here to proceed. >> you can imagine that. [laughter] >> it's so not far away what you're describing, senator, because if we're going to require it for videos there's no reason we can require it for all the other information that people choose to share. that's the world we live in. certainly they should be given the right not to share and he should this be given the choice not to share but i really don't think that it's the job of congress on such a granular basis to make that choice so difficult. >> well, what is difficult? they're having to pop the button now to say, don't share. there's no difference. they're hitting the button share and unshare right now. so what is difficult about saying share versus unshare? >> i actually don't know what the experience has been in europe with that and whether consumers object to it or whether they think it --
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>> you testified consumers wanted that. >> i know it's available. >> technology changes over time so in order to implement that technology today we're able to do it on certain devices, on other devices we're not able to. so are we -- and, you know, older legacy devices we can't -- we can't go back and change those are designed and they won't be able to take advantage of that because we can't give them opt-out every time and because congress told us we have to give them an opt-out every time. giving that control to the consumer and if the consumer so elects to share on an ongoing basis and perhaps you can say opt-out of the notice to unshare, and be bothered by because it's inconvenient for them they have chosen to give their movie-watching onto facebook or other social media platforms, should it be a law
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that they cannot do that. i think from our perspective, it's very important that the consumers understand what they're doing and be given a choice, but to dictate exactly how that is implemented, especially, in a dynamically changing -- >> what you just suggested is you have a built-in opt out and you have the ability to opt-out of the opt-out of the question. >> fundamentally i think that's fine as long as you can get to -- you know the way in which the process works, as long as -- >> let me say it again. i'm going to give you consent, netflix, to share my movies and then when a movie comes up, do you want to opt-out or would you like not to see this screen again for six months and let all your sharing continue in your opt-in? in other words, for those who want to share anything, don't send me the reminder. >> so if that's what consumers want the way to implement it, i'm fine in doing it.
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i have a little bit of trouble having that be legislated because i think over time that may change. it may be that six months isn't the right amount of time, is it three months, is it a year, never for some people. in that sense i think from my perspective, i think the fundamental of taking a principled-based approach of consumers having a control and consumers understanding what they are opting into at their choice is the important thing that we as a people and as we as legislators ought to focus on that fundamental and then the way in which it gets implemented because things change over time, given technology and the way people share and change, that should be somewhat left being implemented. >> great point. thank you, mr. chairman, sorry i went over. >> i thought that was a very good line of questioning. i think it brought out a lot of things and we may not go to a
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second round because i was worried the ranking member didn't get enough time, but the ranking member went into a lot of great points or started early with an alcoholic husband who's afraid of his wife. i thought that was a good point. he might have a hangover and watch something he doesn't -- his wife doesn't approve of. i thought that was a very good point. that's a joke. i was kidding. [laughter] >> no, i think you got -- [inaudible] >> i don't, i don't think it's that. i think that joke curved foul. [laughter] >> so but i think we don't need another round, but i think we -- unless anyone wants to respond to a couple of observations i have here because i think -- mr. hyman, you said it wouldn't be buried in the terms of agreement, the ability to -- we don't know that.
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this piece of legislation doesn't say at all how opting out would work. >> actually, under 2471 there's a specific provision that was added in the amendment that the actual agreement to share has to be separate and distinct from other legal -- >> but not to opt-out of the agreement. >> correct, the opt-out isn't. >> correct, but that's the point and you said it wouldn't be buried in the terms of agreement and you talked about -- yourself about how this is voluntary and you were uncomfortable with that being the law. this is voluntary 'cause netflix does what you do in europe, but no other company would have to do it. so i think that you underscore the point that the ranking member was making, which is the -- it could be incredibly difficult to find out how to opt out of this once you've agreed -- once you're sharing
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everything. i see professor mcgeveran nodding his head. i wonder if you have any -- any thoughts on that. >> i'm just agreeing. so the nadler amendment that was passed in the house bill does set up some specific requirements for how the original blanket consent has to be effectuated. but the bill is silent about what will be required to withdraw that consent later on if you decided you didn't want a particular movie to be shared with your friends or that you want to cancel the previous authorizations. it doesn't say anything at all about how that would happen. >> right -- >> just a few minutes left in this hearing. you can see it in its entirety in our c-span video library. go to the u.s. senate is about to return to session after attending their weekly party lunches. they're expected to gavel in at 2:15, a minute or so from now. some general speeches for most of the day so far. earlier, lawmakers agreed by voice vote to proceed to debate
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on a bill banning insider trading by congressional lawmakers. commonly being referred to as the stock act and we expect to hear more about that this afternoon. now to live coverage of the u.s. senate here on c-span2. the presiding officer: the senate will come to order. mr. lieberman: mr. president. the presiding officer: the senator from connecticut. mr. lieberman: mr. president, what is the regular order, may i ask? the presiding officer: the pending amendment is 1483 by senator leahy. to s. 2038, the stock act. mr. lieberman: i thank the chair. so we're on the stock act, and senator leahy has introduced this amendment, which i
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appreciate that he's done that. this underlying bill, as we said yesterday, responds to the concern about whether members of congress and our staffs are covered by insider trading laws, that is, laws that prohibit a person from using nonpublic information for private profit. i feel most of us here feel we have always been covered by insider trading. there was some question raised about that at the end of last year. in fact, our committee held a hearing on two bills offered, one by senator kristen gillibrand of new york, the other by senator scott brown of massachusetts on this question, and we had some broadly respected, credible experts on securities law that said, in fact, there might be a question about members of congress -- whether members of congress and our staffs were covered by
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securities and exchange commission law and regulation on insider trading for a reason that would only make sense to lawyers, and therefore it may not be sensible, but i will mention it anyway, which is that the law relating to insider trading is actually the result not of a specific statute prohibiting insider trading. it's the hult of regulations and enforcement actions by the s.e.c. pursuant to antifraud provisions of the of the securities and exchange act of 1984. in those regulations that have become the law of insider trading, a necessary element for prosecution for violating insider trading laws is the breach of a duty of trust of a
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fiduciary duty. and the law professors told us at our hearing at the end of last year that, in fact, one might raise the question of whether members of congress had a duty of trust as defined in insider trading cases, which is more typically the duty of trust that a corporate executive, for instance, has to stockholders. now, i presume that most members of congress would say of course we have a duty of trust. we have a very high duty of trust to our country, to our constituents, but it is apparently in the contemplation of securities law perhaps not covered by the existing definitions, and so this bill makes clear that members of congress and our staffs are covered by insider trading laws. we cannot derive personal profit
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from using nonpublic information that we gained as a result of our public offices, and that's made absolutely clear by stating that indeed we do have a duty of trust to the congress, to the government of the united states, and most important to our constituents, to the people who were good enough to send us here. i do think that that provision gives us an opportunity to take a step forward, and it's going to take a lot more than one step to rebuild the trust and confidence that the american people have lost at this moment in our history in congress and overall our federal government. two other very important provisions, one requiring members of congress and our staffs to file a statement within 30 days of any transaction, purchase or sale of a stock or other security with
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the senate, and that would immediately go online as will now as a result of this legislation, the annual financial disclosure statements that we file, so that these incidentally statements are now available to the public but you have got to go to the office here in the senate to get them and copy them. well, that's really out of date and not consistent with the general principles of transparency and disclosure that i think people rightly expect of congress today. so our bill makes clear that both the annual statements and the 30-day statements have to be filed online, and that should help provide the transparency that the s.e.c. itself has said in testimony before the house of representatives on this bill or one quite similar to it would assist them, the s.e.c. in
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guarding against insider trading by members of congress or our staffs. that is that the regular reporting, the 30-day reporting and the online reporting would assist them in preventing insider trading. so i know there are a lot of amendments filed -- actually, not -- thankfully not too many but a significant number, and seeing the presence of the senator from oklahoma, i hope that he may be here to take up one of his amendments because obviously we would all like to begin to debate the amendments and hopefully have some votes. i would yield the floor to the distinguished ranking member, senator collins. the presiding officer: the senator from maine. ms. collins: mr. president, before the senator from oklahoma offers his amendment -- and i will not take a great deal of time in my comments -- i want to respond to some questions that many of our colleagues have raised about the reporting requirements in this bill.
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one of my colleagues, for example, has asked whether if a change in a member's or staff's allocation in the thrift savings program would be required to be reported under this bill. it would not. it is not required to be reported under the annual financial disclosure, and it is not required under this bill. a second of our colleagues has brought up a question of how would mutual funds be treated. again, mr. president, i would say that the treatment is not changed by this bill other than the time period. under this bill as under the annual financial disclosure
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forms, qualified investment funds, those are the widely available mutual funds that are exempt from trades being disclosed, would be exempt under this bill as well. now, as with our annual financial disclosures, you still list the fund and the amount of assets in categories for those funds, but you indicate that they are a qualified, exempt fund, and there is no requirement for trying to figure out what the trades are within that fund. i mentioned these two examples, mr. president, because i feared there is some misinformation about the bill that is circulating. now, there is a legitimate dispute over whether 30 days is too short a time, whether the 90-day period in the original
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bill is better, which is my own preference, but the fact is that the information that is being reported is not being changed. the issue is how often it is -- it is reported. so the inquiries from my colleagues about the implications for the thrift savings plan allocations and for qualified exempt investment funds, widely held mutual funds, remains the same. they are reported the category of the investment, the amount is reported, but the individual trades within the fund are not reported, and i would like to just briefly -- and i apologize for surprising the senator from connecticut with this inquiry and hope he will forgive me for
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that, but i would through the chair pose a question to the senator from connecticut, the chairman of the committee as to whether or not his understanding is the same as mine with regard to the thrift savings plan and qualified mutual funds. the presiding officer: without objection. mr. lieberman: mr. president, first let me thank senator collins for making these points because there is concern about this particular part of the bill and there is a lot of misinformation around. i totally agree with your interpretation, which is that the reporting on the 30-day basis in the bill will not change what is reported and therefore transactions within thrift savings plan accounts and in qualified mutual funds will not have to be reported. thank you for clarifying that. ms. collins: i thank -- i thank
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my colleague and friend from connecticut, the chairman of the committee. thank you, mr. president, for allowing us to pose a question through the chair. i hope our colleagues have heard this exchange, this colloquy which clarifies what appears to be a rather widespread misunderstanding about the reach of this bill. as i said, the 30-day issue is a different issue, legitimate disputes over whether or not that is too aggressive. we have some of our colleagues who think that it should be a ten-day reporting period and an amendment has been filed to that -- to implement that. i personally prefer the 90 days in the original bill. i think that's more realistic, but the fact is there's a lot of misinformation and questions regarding what is reported, and i appreciate the clarification from the senator, the chairman of the committee. thank you, mr. president.
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and at this point, i would yield to senator coburn for the next amendment. mr. coburn: mr. president. the presiding officer: the senator from oklahoma. mr. coburn: thank you. as my colleagues are no doubt aware, i stand in opposition to this bill, not because i think we should have insider trading. as a physician, i am trained to fix the real problem and you're treating the symptoms. you know, several months ago, cbs did a series and showed some questionable but not necessarily insider trading stock trades which brought about, given our low level of confidence by the american public in this institution, has raised the question well, what about insider trading? you know, i honestly believe everyone in our body is never going to use insider trading to advantage themselves over the best interests of the country, but the real problem is the
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confidence in the congress to do what is in the best long-term interest of the country, and the reason that the confidence isn't there doesn't have anything to do with insider trading, as we would normally think about it. it has to do with insider trading that we don't normally think about it, on how we sell a vote to get something else out of the next vote, how we trade a position, how we saw positions were bought on the health care bill, whether it be the cornhusker kickback or the florida gator-aid or whatever it was. the fact is the american people saw behavior of members of congress doing things that were politically expedient rather than what is in the long, best term interests of our country. that is what we ought to be addressing. how do we do that? the way we address that is bring to the floor bills that actually
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address the problems our country is having today. you know, every second of every day this year, our government will borrow $121,000. we'll spend $121,000, not borrow. we'll borrow $52,000 a second, every day. we're not addressing any of that in the senate. we haven't all last year, we aren't this year. the real problem in front of our country is america doesn't see a congress that's willing to address the real issues and make the hard choices. hard choices are coming. we will make those choices ultimately. some of us won't be here, but the longer we delay in making those very difficult choices, like saving medicare, like saving social security, like reforming the tax code to create, stimulate economic
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activity and create job opportunities for americans, that's what they want us doing. the other thing i would mention, i was one of two people who voted against the last ethics law. and i ask my colleagues, did we really improve the senate with the last ethics law? were we -- will we really improve the quality of representation with this law? i don't think so. i think what we're doing is playing a political game to say we're all guilty, now we have to prove that we're not. that's not what our system of law is built on. our system of law is built on the fact that we're innocent until we're proven guilty. and the assumption that the senate is undertaking now is that some of our colleagues are doing insider trading on the stock market. nothing could be further from
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the truth. the real inside trading is the horse trading that goes on in this body that's not always in the best interest of the country. this -- this legislation isn't about the earned back the -- earning back the trust of the american people. the s.e.c. and the ethics committee already have the power to investigate inside trading abuses. we yearly fill out a report saying -- listing every trade we have made. now, if it's true what the chairman of the committee said, that what the s.e.c. would like to do is have it more refined so they can have better access, then that ought to be the bill that we bring forward. we ought to bring forward a bill that says we, number one, are under the laws of the s.e.c., section 10-b, and we are. you don't hear that said anywhere, but we are.
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if our intent is to bring forward a bill to fix the potential for insider trading, then that's what we ought to be doing. but the assumption that we're guilty first and have to prove we're not by making a notification every 30 days of any trade that somebody makes for you, you may not have even been involved but you may have a fiduciary that you've asked to trade for you. and then you're going to have to make that representation. has anybody asked the question, what happens if you do have inside information, have no involvement whatsoever in a trade because you put it if a trust account for you, but it's still being traded and they happen to coordinate at the same time? are you guilty of insider trading or are you going to spend $50,000 to $100 proving yourself that you're not guilty? this is a fine institution. it can be better.
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but it best when it fixes the real problems, not the symptoms of the problems. mr. president, i ask unanimous consent that the pending amendment be set aside and that amendment number 1473 be called up. the presiding officer: is there objection? without objection, so ordered. the clerk will report. the clerk: the senator from oklahoma, mr. coburn for himself and others proposes amendment numbered 1473. mr. coburn: i ask unanimous consent the amendment be considered as read. the presiding officer: without objection, so ordered. mr. coburn: this is a bipartisan amendment, senator mccain, plr mccaskill and senator paul and myself. multiple times we've asked for this but haven't gotten it. what this amendment says is
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every bill that comes before congress and to be considered by the senate, we should determine whether it's duplicating something that's already happening in the federal government. it's common sense. and all we're saying is an analysis by the c.r.s., congressional research service, to determine if the bill creates a new federal program, office, or initiative that would duplicate or overlap any existing federal program, any existing federal office or initiative with a similar mission, similar purpose, similar goal or activities along with a listing of all the overlapping or duplicative federal programs or offices or initiatives or initiative. now, why is that important? last february the g.a.o. brought to us the first third of the federal government an outline to us $200 billion worth of spending on duplicate programs.
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they gave it to us. it was hailed as a great thing that we now -- now we know, we have all these areas. 82 teacher training programs, 47 job training programs, 56 financial literacy programs and on and on and on. they brought that to us. and we all said that was good. the problem with it, we didn't do anything about it. you want to restore confidence in the congress, do something about the problems that have been identified already. so what this is is a good-government policy that says before we act on a new bill that will actually know -- we'll actually know what we're doing and we will have checked with c.r.s. and they will tell us are we duplicating, again, something that's already happening out there. one of the other amendments that we should pass is to have every agency give us their list of programs every year. do you realize there's only one agency in the federal government, one department, who actually knows all their
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programs? there's only one. it's the department of education. they're the only ones you can go to and find out a list of all their programs. the rest of them don't know them. there's no catalogue. they have no idea. so before we pass a new piece of legislation, we ought to at least have the help of the congressional research service and we ought to pass good legislation that doesn't duplicate. it may be a well-intentioned piece of legislation, but because we as a congress have failed in our oversight responsibility, we don't know that it's a duplication when we bring it here to the floor and pass it in the senate. all i'm asking, let's just do a double check, especially in time of trillion-dollar deficits, that we ought to double check and make sure we're not duplicating something that's already happening. that's important for a second reason. if we don't know that we're duplicating something, that means we're not oversighting the thing that's occurring right
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now, the program or the office or the initiative that's out there now. if we don't have the knowledge of it. so rather than create new program, it might actually give us the opportunity to fix one that has well mentioned -- was well mentioned but isn't working. so what this is is a good-government amendment that's bipartisan, that says let's do this before we pass additional legislation, let's know what we're doing. it's complete and it's thorough. it also will provide greater transparency for both us and taxpayers regarding the impact of the legislation that we're passing. now, some may say what if we have an emergency? this has a claws in it -- clause in it that says if this is an emergency, that requirement is waived. so if in the case of an emergency that we need to do something, we will waive the requirement that we have to look at c.v. to see if there's -- c.r.s. to see if there's duplication. it's a commonsense amendment. i hope my colleagues will
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support it and that we can in fact actually tbix the real problems, not the symptoms of the disease. mr. president, i ask that the current amendment -- that's pending be set aside and i call up amendment 1474. the presiding officer: is there objection? without objection, so ordered. the clerk will report. the clerk: the senator from oklahoma, mr. coburn, for himself and mr. mccain, proposes amendment numbered 1474. mr. coburn: mr. president, this is another good-government amendment. what this says, and if we want to restore confidence, this is something we should do. it says before we vote on a bill, we're going to have at least 72 hours to read it. it's going to be available on line with a c.b.o. score so when we cast a vote we actually know what we're casting a vote on, and we actually know how much it costs. it just says it has to be online for 72 hours, in other words,
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we get the privilege of reading the bills we're voting on. and we also get the privilege of knowing the financial cost of the bills or at least an estimate of the financial cost that they will entail. this transparency is designed to make the senate better. you want a bill -- to build confidence with the american public? then the way you build confidence is assure them that you knew exactly what you were doing when you cast a vote. not guessing at what the consequences and the details of that legislation are. for many pieces of legislation, right now what we've seen in the last two or three years here, there was no time given, no capability to study the legislation to make improvements and many of the pieces of legislation came without the ability to modify it.
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hmm. you can't read the legislation and you can't amend it. what does that tell you about the legislative temperament and thoughtfulness of the u.s. senate? you can't read it, you don't have time to contemplate it and consider it, and you can't amend it, even if you could. that doesn't have anything to do with the u.s. senate as it was designed and functioned for 170 years. it has everything to do with politics today rather than the best long-term interests of the country. amendments like this have gained large amount of bipartisan support. and have had support in the past when we've voted on it. although we haven't acquired the 67 votes that have been necessary in the past to pass this. cosponsor of this amendment is
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senator mccain. he understands the importance of reading what we pass. all our colleagues do. why not put the self-discipline in that we have to, rather than the political moment that says you got to vote on this whether you know anything about it or not? eight of my colleagues during the health care debate sent a letter to review the health care legislation. eight of my colleagues who ultimately voted for the health care legislation. and what their request was is give us 72 hours to read this. the legislative text and complete budget scores from the congressional budget office of the health care legislation considered on the senate should be made available on a website the public can access for at least 7 hours prior to the first vote to proceed to the legislation. why shouldn't the public be able to see what we're doing 72 hours
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before we do it and just as important, why shouldn't we be able to know what we're doing before we do it? so it's a straightforward, commonsense, transparent to the american public as well as to our colleagues in the senate that now you have the time available to read a piece of legislation, contemplate it and hopefully have the opportunity to improve it. what's the goal? the best long-term outcome for the country. mr. president, i'd ask that the pending amendment be set aside and i call up amendment 1476. the presiding officer: without objection, so ordered. the clerk will report. the clerk: the senator from oklahoma, mr. coburn proposes amendment numbered 176. to amendment numbered 1470. mr. coburn: mr. president, this amendment would provide a complete substitute for the stock act.
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what it does, it requires members and staff to certify that they have not used inside information for private financial profit. in other words, they're going to make an affirmative statement under the law that they have not violated section 10-b of the securities and exchange act. all members would be required to sign the following statement on annual financial disclosure forms. i hereby certify the financial transactions reflected in this disclosure form were not made on the basis of material nonpublic information. the stock act does not create new restrictions for congress against insider trading. we all know that. those restrictions are there. there's new restrictions. we don't change the restrictions at all. the s.e.c. has stated that the members of congress and staff are already subject to insider trading laws. they just need some clarity with that. they also would like to have timeliness with that.
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in fact, all americans are subject to these laws including the senate, found primarily in section 10-b. this provision restricts anyone who trades stocks from using material nonpublic information to profit financially and congress is no different than anybody else. the stock act was carefully written to apply simply reaffirm that congress is not exempletted from these laws and i believe the chairman stated that just a moment ago which we would include in this. as such, the bill brings new reforms to the table, nor does it create any real expectation that behavior will change. it just requires a paperwork filing. all members and relevant staff should have to certify they're not trading on private information. each year, every member and certain high-salaried staff are required to close their financial holdings. senate rule 37 also already prohibits any senator or staff person from conflicts of interest. that would be a conflict of interest. specifically, rule 37 pricks
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the receipt of compensation by virtue of influence improperly exerted from his member, his position as a member or officer or employee. so we're covered doubly. we're already covered under section 37 and we're covered under section 10-b of the securities and exchange act. if in fact somebody fails to do this, then they'll be liable under the false statements act and title 18 section 10001 which makes it a crime to lie to congress. that section prohibits anyone from knowingly and willfully making false, figure fictitiousr fraudulent statement to the government. the punishment for violating the false statements act is fine and a prison term up to five years. the does not mean that someone who makes a good faith effort but mistakenly forgets something will face punishment. yet any member who knowingly signs that form in error will be
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liable for making a false statement on his or her financing, carrying large penalties. i think efforts to reestablish trust in the congress are important. i disagree with my colleagues that this is one that will make a difference. it won't. nothing materially changes other than a paperwork requirement. nothing materially changes other than every 30 days, you have to report instead of annually. what is the real problem? the people of this country do not have confidence in congress because congress does not address the real issues of the country. mr. chairman, i yield the floor. mr. lieberman: mr. president? the presiding officer: the senator from connecticut. mr. lieberman: mr. president, i rise to thank my friend from oklahoma for coming to the floor
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and introducing these three amendments. it begins the process of considering the legislation. i want to go back to the first point that he made which i think is an important point, that -- that we've got to do a lot more than deal with the concern that members of congress and our staffs are not covered by insider trading laws to restore the confidence of the american people in this institution. it's taken a long time to get us as low as we are in public esteem today and it's going to ache a long time, i'm afraid, to get back to it. the first thing we could do is begin to work more across party lines, to be less partisan, to be less ideologically rigid. this institution represents people across the widest array of origins, of ideologies, of
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political policy beliefs, et cetera, et cetera, et cetera. we can't function without compromise. and when i say "compromise," i don't mean compromise of principle. i mean compromise in the sense that you can never get every -- you can rarely in a democratic institution of this kind -- small "d" -- get everything you aspire to get on a particular piece of legislation. if you get half of what you're aspiring to or even more hopefully, that's a good result. reminds me of what my dad used to say, which was that in a -- in a marriage, a successful marriage, each spouse felt that they were giving in 70% of the time to the other spouse. and maybe that's a good guideline for a successful congress. we're not -- we're not doing that enough here and we're particularly not doing enough on the central question of the deficit annually and the debt overall. and the public sees it so they're upset. so i -- this -- i want to,
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therefore, put what we're doing in the stock act in context. i think if we pass it, both because of the clarity with which we state that members of congress and our staffs are covered by antiinsider trading laws and the disclosure improvements that we make in the law, will take a step forward in beginning to rebuild some confidence that the american people have lost in this institution. but, oh, lord, it's only the beginning. and the more we can deal particularly with the imbalances that we've created in our federal books, the more we're going to restore confidence in this institution. also, i hope that we can prove on this measure and any number of others that we're still capable of working across party lines to get things done here. that's, after all, why our
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constituents sent us here. i -- this is the beginning of my 24th year in the senate. it's been a privilege. this is my last year in the senate since i've announced i'm not seeking reelection. i'm forced to say that last year was the least productive of the 23 years i've been here and i hope that we can perhaps on this bill prove at least that we can come together and get this -- get this done and it will be the beginning of getting other, much more important things done, including, as senator coburn has stated, to do something about the debt and the deficit. and i've been privileged to work with him on some ideas that we've put forward to make that happen. you can't do it and make everybody happy. you can't do it and make all the interest groups happy. but that's not why we came here. we came here to -- to support and protect this extraordinary country of ours that we're blessed to be citizens of. so i say that by way of first
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reaction. the second is that i'd like to take some time in that context to take a look at amendments 1473 and 1474 that the senator from oklahoma has introduced. the first to prevent the creation of duplicative and overlapping federal programs, and the second is this requirement that all legislation be placed on-line for 72 hours before voted on in the house and senate. both of these on first response have some merit, in my opinion. certainly the first one does have a lot of merit. i'm concerned. i know all -- all of us, senator collins, senator brown, senator gillibrand, have worked to bring the main parts of the bill out, are concerned that we do not go too far afield in amendments to the bill for fear that it will weight it down and will ultimately get stopped, at worst, that the majority leader will take the bill down from the floor because we're not coming to a point of completing our
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business because amendments keep coming in that are not relevant. but these are two serious amendments and i want to look at them and take a little time to respond. the third, amendment 1476, i guess is a good news/bad news reaction that i have. the good news is, this really is directly relevant to the substance of the bill. the bad news, if you will, is that i'm opposed to it because it really does -- it's a totally different approach to what we're trying to do in the bill. i don't think it accomplishes what -- what the intention of most members is on this bill because it would really replace the entire stock act with the requirement that members or anyone in the government who has to fill out a financial disclosure form certify that they, we, haven't traded on inside information. i don't think as a result that the amendment does anything to
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clarify the current ambiguity in the law. that is, the question we heard raised before our committee by these experts on securities law about whether members of congress are really covered. and if we don't clarify that -- that we have a duty of trust to bring our behavior totally within existing securities law on -- against insider trading, then i don't think the legislation will get us to where we need to go and we're still left with the kind of ambiguity that creates the kind of mistrust that i know none of us want to have. we've spoken at lank -- at length on this question to the securities and exchange commission staff and i must say that they share the concerns that i've just expressed and believe that if the legislation doesn't explicitly state that a duty of trust exists and is held by members of congress, then the
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legislation will not do what is needed to get at the problem, which is whether an insider trading case brought before a court could be objected to by a member of congress who is the target of that suit. yes, i'd be happy to yield. mr. coburn: through the chair, would the chairman accept that modification to my amendment? that we would, in fact, establish positively that members of congress are under 10-b of the securities and exchange commission? would that give you less heartburn? mr. lieberman: well, it would give me less heartburn but it would probably still need me needing at least a rolaid. mr. coburn: well, i have plenty of those. as a matter of fact, i'll do one better. i'll give you zantac. mr. leamr. lieberman: [laughter] no. there are three main parts to the stock act. one is the declaration we've just talked about and the second and third are disclosure
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requirements, one 30 days and then the other the on-line requirement. but i'm glad to talk with you about adding the requirement of a certification to the stock act as opposed to substituting it for the whole stock act. mr. coburn: mr. president? the presiding officer: the senator from oklahoma. mr. coburn: i would ask unanimous consent that my amendment 1476 be modified with a change to the instruction line only. i'm just doing some housekeeping on that. the presiding officer: is there objection? without objection, so ordered. mr. coburn: i would make one other point and i would -- and i'm not trying to put my chairman on the hot seat. but nobody in this chamber can name somebody right now who's trading on inside information. i believe that's a true statement. and yet we're changing the law not because anybody has done
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something wrong but because we're struggling to try to get people to think that we're doing things right. and there's nothing wrong with that as long as we're not going to entrap members of our colleagues. the question that i would have for you is, if we can't name somebody and if there's not factual proof, what we're really putting the senate on notice for is that, by the way, you're assumed to be trading on inside information now and, therefore, we must do this to assure that you're not. well, i don't believe anybody in this body's doing that. and when we put our members on that position by changing the law to -- for example, 30 days. if i have three stock trades and i miss it by one day, what's the consequence of that?
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filing, and of this bill? what's going to be the neanlt comes out of the ethics committee for missing it one day or for missing one of the three trades because you didn't know? we have lots of questions that are not answered. and i can tell you many members of this body have spent a lot of their personal money defending themselves on accusations that were absolutely untrue before the ethics committee and that should be addressed and clarified in the body, the report language of this bill. i have no doubt this bill's going to pass in one form or another. i understand i'm in the very slim majority of people that think it's unnecessary because i think the law already applies to us. and i also don't think we have a bunch of cheats working in the senate. but would you agree, through the chair, that we ought to make clarifications of everything that we can so we know what the ultimate results are? or are we going to leave that up
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to the lawyers on the ethics committee? what are we going to do with that? are we going to determine what the penalties are for late filing or an accidental omission? what is going to be our direction to the ethics committee in regards to this? mr. lieberman: mr. president, i thank senator coburn. let me go back to the first point but it's not the question he ultimately asked. it would be -- the senator is raising a very high standard because i hope that nobody's involved in insider trading as a member of congress. i presume they're not. there were some serious allegations made last year by people outside congress against members of -- certain members of congress, small number. they've been denied and responded to by those members. i presume if there's any substance to them, the s.e.c. will be investigating and take action. but -- but obviously,
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necessarily, if we're dealing with insider trading, we wouldn't know it's going on because they're using nonpublic information privately to secure private profit. so as you well know, the purpose of the law to make clear that if anybody is doing this -- and, again, i -- i know the people here. this is an honorable group of people. but if anybody is acting dishonorably -- human nature being what it is -- then -- and a prosecution is brought by the securities and exchange commission, then there won't -- there won't be any defense that the law doesn't cover members of congress. simple as that. but let me come to the other point. i think there's a lot of -- i know there's a lot of unease among some members about the 30-day requirement in this bill for -- that is, within 30 days you've got to file a disclosure of any trade in a stock or security that a member has been
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involved in that is a value of more than $1,000, and there's a lot of concern about what requirements that will put on members. ultimately, the ethics committee will adjudicate this. i would assume that there would be some rule of reasonableness of an unintentional error -- if an unintentional error was made. and i certainly am happy to try to clarify in report language what our intention is. but the overall intention is to create transparency, and while i'm on this -- and i'll just be very brief on this -- i don't think people are worried about what it will take to fulfill this requirement and that it's in some sense unfair to ask members of congress to have to disclose stock purchases or sales within 30 days, but it's my understanding that people defined by law as "corporate
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insiders" have to declare within 48 hours of trades they make in their company stock, and staff of the s.e.c. have to publicly declare their trades within five days. so it's possible to do this. i gather it's possible to do it by simply asking whoever trades for you to copy the office here in the senate when a transaction occurs and then it automatically goes into a database and online. we're asking more, and for some it will be an inconvenience, but we're din. w-- but we're different. we hold a public office and we have a public trust and responsibility. so that's why this provision was in the original stock act introduced in the house, bipartisan, and here in the
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senate both by senator gillibrand and senator brown. and why -- but i do want to state that i'm happy to work with the senator from oklahoma on report language that will encourage the ethics committee to apply a kind of rule of reason, if there is an unintentional violation of that 30-day reporting requirement. mr. coburn: mr. president? the presiding officer: the senator from oklahoma. mr. coburn: i just have one more question for the chairman. if in fact this is what we should do -- and i think the body is going to agree that this is when we should do -- you don't think this should apply to the -- don't you think this should apply to the administration as well? the executive branch? this should apply, the same 30-day rule, to every member of the executive branch who -- you talk about real knowledge of inside information, they have
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it. twee don't really have it we don't really have it. they have it. why would this rule, no matter who is the president, why would this rule not apply to executive employees in the administration? mr. lieberman: mr. president, the senator from oklahoma is asking good questions. let me say first as a point of clarification that as a result of an amendment submitted in the committee by senator paul, and adopted, the insider trading parts of the bill do relate to executive branch employees. the 30-day disclosure requirement does not. and i'm glued -- many a happy to work with you on this. i gather that the administration
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itself applies certain disclosure requirements to a group of people in the administration at a cabinet level or somewhat slightly below. but obviously not to all executive branch employees. but -- we can talk about this. i continue to be concerned overall that we're going to extend this so far and make it so good that it's going to fall of its own weight. and not make it throug through. but you're raising a reasonable question and senator brown and i just talked about. we're glad to continue the conversation. mr. coburn: mr. president, i would make the point -- a couple. one is we already file all our stock trades beings, correct? every year? in every investment we have every year. we already do that. we're already under rule 37 of
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the rules of the senate, which forbids any conflict of interest action that would benefit ourselves. that would include inside information to trade stocks. there are five to ten times as many members of congress and senior in senior executive positions within the -- in senior executive positions within the administration that in fact this same thing should apply to. and if the important thing is within 30 days, my hope would be the chairman and the sponsor of the bill, senator brown, would give very clear instructions to the ethics committee on how this is to work because i will note for you, last year 16 senators got 90-day extension on their filings with the ethics committee. that's 16%. well, we've got to have some vow to make sure we don't put the
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members, who are absolutely innocent of anything, in a corner because they can't timely respond to this bill. so my hope is -- and i will finish with this; i know senator brown wants to speak -- looking at the timeliness of the filing, i think, is important to not make -- to still accomplish what you want but not make it so rigorous that people are going to fall out of that. and we all know how things get busy here, how we come in, we come out, we're traveling, we have all these things that we're responding to. this will be a difficult thing for many members to comply with the 30 days. so my hope is that you would look at that and you would also look at rule 37 of the senate ethics, because in fact we're already doubly covered. we're covered under 10-b, and i don't have any problem with modifying my amendment to say, we are covered, so you cannot have a defense to say you're not. but we're also covered under rule 37, which forbids any
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conflict of interest unto which you would benefit personally. with that, i would yield the floor and thank the chairman of the committee and the president. mr. brown: mr. president? the presiding officer: the senator from massachusetts. mr. brown: thank you, mr. president. i've enjoyed the back-and-forth between the chairman and the senator from oklahoma. the senator from oklahoma has raised some very valid points. i originally asked for a 90-day reporting and it was changed out of committee to the 30-day period. and obviously i'm happy to work with the senator from oklahoma and the chairman and the ranking member to determine if in fact there is some guidance necessary to ethics and, sure, we're happy to do it. this needs to not only be done in the proper manner but obviously implemented in a way that everybody can comply and not be caught, you know, short in that type of situation. so i'm looking forward in speaking to the chairman that we will certainly take those valid
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points into consideration, any guidance we need to put in for the record, or letters of guidance to the ethics as to what our legislative intent it and i'm happy to do that. and i look forward to continuing that dialogue. thank you, and i yield the floor. mr. lieberman: i thank my friend from massachusetts. seeing no one else seeking recognition, mr. president, i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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the presiding officer: the senator from vermont. mr. sanders: i ask that the quorum call be vitiated. officer without objection. mr. sanders: mr. president, i wanted to say a word about an issue that i think has not gotten the kind of attention that it deserves here in washington or even among the general public, and that is the situation regarding our postal service. right now, for a number of reasons, the postal service is facing financial difficulties.
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number one, it is no secret to any american that first-class mail is -- has declined significantly because the american people are using e-mail and not first-class mail, and that decline in first-class mail has significantly impacted the revenue for the post office. second of all, not widely known is the fact that the postal service every single year now because of legislation passed in 2006 is forced to come up with $5.5 billion every single year for future health retiree benefits. to the best of my knowledge and to the best of the knowledge of anybody who i have talked to, there is no agency of government forced to come up with anything near this kind of onerous requirement, nor is any corporation in the private
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sector doing that as well. so the issue that we face, mr. president, is whether or not we are going to save the united states postal service, whether or not we're going to bring about reforms which make the postal service strong and relevant to the 21st century and the digital age, or whether we do as the postmaster general has proposed: cut 40% of the workforce, shut down 3,700 post offices, most of them rural, end saturday service, and lay off or cut back on the workforce of the postal service by 40%, over 200,000 american workers, many of them, by the way, veterans, who are now serving and worging in the post office. so let me just start off again
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with what the postmaster general has proposed. let me talk a little about legislation which has been led by senator lieberman and senator carper, which i think will be coming to the floor, i expect, next week, and then talk about where i think and a number of us think we should be going to strengthen that bill. number one, this is what the postmaster general has suggested that he needs to do in order to solve the financial problems facing the post office: one, close down about 3,700 mostly rural post offices. and i would tell you, mr. president, coming from a rural state that a post office is not just a post office. in many parts of verntle many parts of america -- in many parts of verntle many parts of america, rural post offices serve many, many functions. if you get rid of those post offices, you are really causing severe distress to the identity,
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the sense of self of small towns in rural america. number two, what the postmaster general has suggested is the shutting down of about 252 mail processing facilities, about half of the mail processing facilities in this country. if you do that, there is no debate that you are significantly slowing down the delivery of mail in america. if you used to put a letter in a postal box, it might get there in one day. now the talk is, it might gleet in three days. if today it gets there in three days, it might in the future under these cuts get there in five days. and here is the fear that i have and many other members of the senate and house have: if we are -- if the post office is trying to compete against the instantaneous communications of
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e-mail, what does it mean that you are slowing down significantly mail service? and many of us believe that this is really the beginning of a death spiral for the post office in the sense that many consumers, many businesses will say, hey, what's the sense of me working with the post office if my mail or packages are going to get there in three days or five days? so we think that shutting down 252 mail processing facilities, slowing down mail services is really laying the foundation for the destruction of the post office as we know it. to my mind, the issue is not whether we make change or maintain the status quo. the status quo is not working. the post office has to change. in my view, and i think the view of many others, the post office must become much more aggressive, much more entrepreneurial, must be going out to the business community,
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must be going out to consumers and say we have these services we can offer. i'll give you a few examples. some of them, by the way, are included in the legislation brought forth by senators lieberman and carper and collins and scott brown. for example, in a rural state, if people would like to get, walk into a post office and get a letter notarized, they can't do it today. if people walk in to a post office and want to get ten copies of their letter, can't do it today. the united states congress has said you can't do that. if somebody walks into a rural post office, wants to get a fishing license or a hunting license or fill out a drivers license, can't do that right now. so i think what we need is a new business model for the post office, much more entrepreneurial. i would say -- and what's happening around the world is clearly the united states postal service is not the only postal
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service having to deal with the digital world. what we're seeing in europe and throughout the world is countries responding by giving the, their postal services much more flexibility. one example, a lot of people are unemployed. a lot of people get unemployment checks. sometimes in order to cash those checks, they have to go to a payday lender. why can't they walk into a postal service and cash that check at a minimal fee rather than paying 10%, 15%, 20% to a payday lender? one of the provisions that i think has got to be included in any serious postal reform legislation is a blue-ribbon commission made up of the best entrepreneurs we can find, those people within the postal service who have the most experience, who will tell us what can we do and how can we raise additional revenue when you've got thousands of post offices all
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over this country? can they be renting out their space? what other services can they be providing? right now we have the postal -- our letter carriers delivering mail to about 150 million doors every single day, six days a week all over the country. what more can they be doing? so the debate that we're having is two visions of the future of the post office. number one, the postmaster general is saying let's cut 40% of the workforce over a period of time. let's slow down mail delivery service. and that's the business model that he is proposing. some of us are saying that when you have a rural constituency, when you have senior citizens who live at the end of a dirt road who are dependent upon the post office in order to get their prescription drugs in the mail, when you have rural areas that very much depend on rural post offices, that the goal is
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to give more flexibility to the post office so they can be more competitive, so they can raise additional sums of funding in order to deal with their financial problems. a couple of specific points: almost everybody agrees now that the $5.5 billion being required from the post office is absolutely onerous. i have talked to the office of personnel management. they think $2.5 billion or $3 billion is quite enough given the fact we have $45 million already in the account. you talk to people, they say given the fact that that $45 billion is already earning interest, you don't have to do anything. you don't have to add anything more into that account and it will deal with all of the future health care retiree benefits that the post office requires. so what i believe that we have got to be very firm and say, number one, if the post office
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is going to survive in any significant way, we have got to maintain one- to three-day delivery standards for first-class mail. second of all, we've got to maintain six-day delivery of mail, not end saturday service. third, we've got to protect our rural post offices. fourthly, we have got to significantly reduce prefunding requirements for future retire aye health benefits -- retiree health benefits, not to mention there is also widespread agreement that the postal service has overpaid the fers account, federal employment retirement service, by some $11 billion. obviously that has got to be dealt with. lastly, in my view, as i said previously, we need to develop a new business model for the postal service, get them involved in the digital age.
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not run away from it. get them involved. expand what they can do both with state and local government as well as what they can do with the private sector. so, mr. president, in the coming days, this is an issue that a number of us will be working on, and i look forward to the support of my colleagues on both sides of the aisle. and with that, mr. president, i would yield the floor. a senator: mr. president? the presiding officer: the senator from massachusetts. mr. brown: thank you, mr. president. i appreciate the gentleman's referencing to the post office and the postal issue is something senator collins, lieberman and carper have been working on probably 300 or 400 hours at this point. i look forward to his involvement as well. getting back to the business at hand, dealing with the stock act as we've been alternating back and forth, i would ask to recognize senator paul. he has, i believe, three amendments that he'd like to offer. i yield the floor. thank you.
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mr. paul: mr. president, i ask unanimous consent to set aside the pending amendment and call up amendments 1484, 1485 and 1487 en bloc. the presiding officer: is there objection? without objection, so ordered. the clerk will report the amendments. the clerk: the senator from kentucky, mr. paul, proposes amendments numbered 1484, 1485, and 1487. mr. paul: i ask unanimous consent that the reading of the amendments be dispensed with. the presiding officer: without objection. mr. paul: these amendments are recognizing what the authors of these bills have been discussing, that people should not profit off of their involvement in government. they shouldn't profit off of special relationships. they shouldn't profit off of special knowledge they gain in the function of serving the people. currently there are some large donors that have been giving to
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this administration who have profited enormously and disproportionately. this will allow this bill to apply to the administration, and i don't believe people who are multimillionaires and billionaires should use the apparatus of government as was used in the loans that were given to solyndra by someone who is profiting off of their relationship and ties to the president, profiting off of people who used to work for these companies now, who are now employed in the administration and using these connections to get taxpayer money to go to private individuals. this is wrong and this should stop. i think this bill is a great vehicle for discussing how people in government are abusing their roles in government to make more money at the expense of the taxpayer. and i think it should end. thank you, and i yield back my time to the senator from
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massachusetts. mr. brown: mr. president? sproeup the senator from massachusetts -- the presiding officer: the senator from massachusetts. mr. brown: thank you. we obviously just received the amendments and look forward to digesting them and actually working on some of the points well taken. we look forward to doing that. since there is no democrat here to offer another amendment, i would, in the spirit of the back and forth, just ask that -- and i yield the floor to the senator from south carolina. the presiding officer: the senator from south carolina s. mr. demint: i ask unanimous consent to set aside the pending amendment. i have amendment 1488 at the desk and would like to ask for its immediate consideration. the presiding officer: without objection. the clerk will report. the clerk: the senator from south carolina, mr. demint, proposes an amendment numbered 1488 to amendment numbered 1470. at the appropriate place insert the following: section, sense of the senate. it is the sense of the senate that the senate should pass a joint resolution proposing an amendment to the constitution that limits the number of terms a member of congress may serve.
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mr. demint: thank you, mr. president. i allowed that to be read because it's so short. i think all of us know that in just about all areas of life power corrupts. and despite the good people here in the congress, the good intentions here, we found that the longer folks stay here in washington, the more likely that their associations with interest groups and other temptations often cause bad behavior. what we're working on here with this stock act is just treating the symptoms again, when what we need to do is work on root causes. if we bring a professional class of politicians to washington -- and we know incumbents always have the advantage in reelection. elections are not the only way to limit terms. if we want good government, if we want representation of the people, then we need to have folks represented in the house and the senate that are from the
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people and not from an elite class of politicians here in washington. that's why for years many of us on both sides of the aisle have worked on this idea of term limits. my amendment is not a law. it does not set any specific term limits for the house or the senate. it's a sense of the senate that says we should pass a constitutional amendment that allows the states to ratify some limit in the terms of office. we know that this would likely attract people who want to make representation a calling and not a career. and so, i would hope that as we look at this total bill, and certainly we don't want insider trading, congressmen and senators benefitting from their service in any personal way. but if we want to get at the root cause of any of the problems here, many of the problems between parties across the aisle, many of the false
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differences, we just need to limit the terms of people who come to washington, bring in some fresh horses from all around the country, and i think we'll get better government, certainly less corruption. i thank you, mr. president. i yield back and note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: the presiding officer: the senator from alaska. mr. begich: i make the request to vacate the quorum call. the presiding officer: without objection. mr. begich: mr. president, i know there's been some discussion. today we're talking about the stock act.
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i know there's been some back and forth on what's the appropriate time that people should notify the public. i just hope at the end of the day our body is not afraid of transparency at every level. that amendment which i brought forward in the committee that i sit on which dealt with the stock act made sure that all issues around any transactions that you make are going to be publicly disclosed in a timely manner -- 30 days -- but electronically. so it doesn't matter where you are around this country, you can access it. i hope we don't forget what our goal is here, and that is to create more disclosure, more transparency so people know what we are doing here in congress. and the stock act is just one of those steps. i rise today, mr. president, to support the stock act as a sponsor of this act, legislating -- legislation prohibiting inside trading by members of congress and their
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staffs. since day one in the senate, i've made transparency a top priority in my office. alaskans deserve to know what their members of congress are up to, and that is why i worked hard to make sure that they have access to critical information. i believe we must hold ourselves to a higher standard. since being elected, i have posted my personal disclosures, my personal financial disclosures on my senate web site, so my constituents have full knowledge of how and what i'm engaged in and they can get it electronically, access it electronically to, my personal information any time they want. this is something senators are not required to do, but it is just common sense. i'll talk more about the transparency in just a moment. when it comes to the stock act, i know my constituents at home in alaska and other americans are probably shocked this bill is even necessary. they are asking themselves -- and i've heard this -- is it really legal for members of
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congress to participate in inside trading? the fact is inside trading is illegal for all americans, including members of congress. all along the s.e.c., the securities and exchange commission, has had the authority to enforce inside trading laws. but it's time for a little clarity. trust and accountability are critical to our roles here in congress. that's why i support and have cosponsored this important bill, the stock act. the idea in this phrase stands for stop trading on congressional knowledge. again, the stock act. this bill reaffirms that it is against the law for members of congress to engage in insider trading and confirm that anyone who doesn't follow the rules will be prosecuted. members of congress are not and should not be immune. we have a responsibility to do our jobs in an honest, open and
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transparent manner, and to demonstrate that we are here every day fighting for our residents, in my case, the residents of alaska. all you need to do is look at congress' approval rating to figure out americans don't think we have lived up to our end of the deal. this bill is an important step in the right direction to regaining public trust. however, just reminding our colleagues of laws that should have already -- that we should have already known about is not enough. transparency is a key element of moving forward. and like i said, it's just common sense. that is why senator tester and i introduced a transparency amendment during the markup process as we sat in the committee listening to the testimony, the debate, we thought it was necessary to take even an additional step. now, i'm pleased to say it was adopted and incorporate norwood this bill by the full committee. the provision is simple. it requires that the annual
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financial disclosure form, the ones that i put on my web site filed by members of congress and their staffs be posted online and accessible to the american public. when you think about what -- where we are in this world, the 21st century with all this electronics and telecommunications, how we're not doing that today, you know, i went on the alaska, alaska public options commission web site, which is the equivalent of what we're talking about today, and if you want to file yours in alaska, your disclosure form as an alaska state legislator or in my case as a former mayor when i was there, it's now all electronic. that's how it's filed. the current system that we have here is outdated, it's not transparent, it's not easily accessible to our folks back home. under this new provision, members, candidates, staffs must file their financial disclosure forms electronically. they will use a new system created and maintained by the secretary of the senate, the
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sergeant at arms and the clerk of the house of representatives. the american public will be able to search, sort and download data contained in the financial disclosure forms. this information will be maintained online for six years after -- during their time in service and after the member leaves office, six years after they leave. i want to commend chairman lieberman and ranking member collins and senators gillibrand and brown and levin for their work on this piece of legislation. the stock act will make congress more accountable and i hope it will inspire confidence in the american people that we're here to represent the interests and not our own. again, i would encourage the passage of this legislation. it is another step to ensure that we have full transparency and we should never be afraid of making sure our folks back home know exactly who we are, what we're doing and what our work is here in washington. mr. president, i yield the floor and note the absence of a
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quorum. mr. brown: mr. president. the presiding officer: the senator from massachusetts. mr. brown: thank you, mr. president. first of all, i just want to commend the senator from alaska for his efforts during the committee process. he offered some good amendments that we ultimately took up and accepted and we look forward to his continued involvement in this process, because as we have said, we need to make sure that all of the amendments are relevant and we would hope that he would join with us and get some of his colleagues to focus on the very important issues that we're trying to work on, not get sidetracked. so that being said, once again, i congratulate him for his efforts and look forward to working with him, and i yield the floor. mr. lieberman: mr. president. the presiding officer: the senator from connecticut. mr. lieberman: i thank the chair. let me just join in what the senator from massachusetts said. senator begich, together with senator tester, offered an amendment in the committee that has not gotten as much attention as some other parts of this bill, but it will have at least
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as great, as positive of an effect as parts of the other bill. it's so simple that it makes you wonder why we haven't -- i have been quoting dr. seuss lately. i don't go to dr. seuss on this one. but i think he did say something like sometimes the best answers to the questions that are complicated are simple answers, something like that. i'm losing something in the translation. but senator begich and senator tester require that the annual financial reports that we file, which are public documents, but for the public to see them, they or some representative have to go to the office of the secretary of the senate, either to look at them or make copies. you know, we're in the information age, digital age. so senator begich and senator tester really took a small step on the bill, which is really a large step for the american people, which is that the
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reports will now be online and electronically filed, and everybody, not just the s.e.c., will have immediate access to -- to those financial disclosure reports. incidentally, the 30-day provision for disclosure will also be covered by that, so those will also be available. the director of enforcement, robert kuzami, of the s.e.c. testified before the house, house committee on the comparable bill that the 30-day requirement and the annual requirement for electronic filing would assist the s.e.c. in carrying out its responsibilities. so, again, i thank the senator from alaska for his contribution to this bill. mr. begich: mr. president, if i can just make one quick comment. imagine folks from alaska that wanted to go get a copy of the report. they would have to find someone in d.c. to go to the clerk to get a copy and then send it
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over. now if this all passes, and we're very excited about this, they could just go online anywhere. thank you to senator lieberman, senator brown and other members who worked on this. we were just very honored to be able to contribute our piece to it. like you said, we're in the information age. it seems like we could make it easier for the public to know what we're up to. thank you for your very kind comments. mr. president, i yield the floor. the presiding officer: the clerk will call the roll. quorum call:
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ms. klobuchar i rise in support of the stop trading on congressional act, known as the stock act, restoring the public's faith in government. i'm a cosponsor of the stock act and have been working to address concerns about insider trading in congress. i appreciate the leadership of my colleague from minnesota, tim walls, over in the house, who spearhead pedestrian the bill in the senate as well as the work of my colleagues including senator gillibrand and senator brown who have shown leadership in moving this issue forward. mr. president, no one is above the law in this country. least of all the lawmakers. at a time when americans are crying out for leaders who are willing to put public interest before political gain, the stock act presents a rare opportunity for both parties to
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come together and pass a bill that not only makes for good policy but that is very simply the right thing to do. over the last three years, we've worked to restore accountability and integrity to the major institutions in this country. we've worked to rein in recklessness on wall street. we've enforced greater accountability in federal budgets. and in 2007, we passed historic reforms to strengthen congressional ethics laws. but i'm standing here today because we can and must do more. those of us who have the privilege of writing the rules have a responsibility to play by the rules, to not just talk the talk but to walk the walk. and the stock act is about making sure that we're doing just that. this commonsense bill will strengthen our democracy by ensuring that no federal employee or member of congress can profit from nonpublic information they've obtained through their position. first and foremost, the legislation clarifies and
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strengthens laws for regulating insider trading by members of congress and their staff. it redefines the practice to clearly state that it is illegal to purchase assets based on knowledge gained through congressional work or service, ensuring members of congress are held to the same standards as the people that we represent. that seems only fair. now, some people have argued that there are already laws on the books for this, but the fact of the matter is that insider trading by members of congress and their staff is currently not prohibited by the securities exchange act or congressional rules. furthermore, the status of trading on congressional information has never been explicitly outlawed. the resulting ambiguity has made it incredibly difficult to enforce these rules, which is almost certainly part of the reason not a single violation has ever been prosecuted. the stock act would clear up the ambiguity and make these laws crystal clear.
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it would give both the sec and the ethics committee in each chamber the authority to investigate and prosecute cases of insider trading and it would make it a violation of the rules and the house and the senate to engage in such activity, meaning that anyone who uses their role as a member of congress to enrich themselves would have to answer to the department of justice and the securities exchange commission. the bill would also enforce better oversight by significantly strength then in reporting requirements. members of congress are already required to disclose the purchase or sale of securities and commodities on an annual basis and the stock act would take these requirements several steps further. not only would it mandate that members and employees disclose any and all transactions of over a thousand dollars within days of the trade, but it would require that information about the transaction be published on-line. finally, to close the revolving door between congress and special interest groups, the
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stock act would introduce some much-needed transparency into the industry known as political intelligence consulting. the practice of reaching out to people working in the legislative and executive branches to gain market intelligence and regarding -- regarding proposed rules, regulations and bills. the stock act would require the government accountability office to study this issue and see what we can do to ensure that these consultants are subject to the same reporting requirements and restrictions imposed on lobbyists. mr. president, trust is the tie that binds our democracy, but with faith in government now at an all-time low, it's clear that those ties have frayed. why would we not want to strengthen those bonds? why would we not want to show the people that sent us to washington that we have nothing to hide by passing this bill? america was built on the principles of hard work, fair play, and personal responsibility. those are the rules that
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middle-class families in states like minnesota and all across america are still playing by today. we in congress need to be willing to stand up and say we'll do the same. i want to end my remarks today by sharing two letters that were sent to my office on the subject of the stock act. the first is from a minnesotan named robert and this is what he wrote. he said, "elected officials need to get back to the business of representing those who sent them to washington to serve, not increasing their personal wealth based upon information they learn from holding those offic offices, information that were it not for their elected office, they would otherwise not be privy to." the second letter comes from a minnesotan named david who makes this issue crystal clear. he says, "voters elect politicians to do what is best for the country, not to become rich." well, i couldn't have put it better myself and i couldn't agree more. i arrived in this town, mr. president, in a saturn with my college dishes and a shower curtain from 1985 in the back
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seat, so, clearly, this is not as relevant to my personal situation, but i truly believe that if we're going to restore trust in government, we need to pass this bill. thank you, mr. president. i yield the floor. the presiding officer: the senator from massachusetts. mr. brown: thank you, mr. president:mr. president, certaintily -- thank you, mr. president. mr. president, i certainly want to commend the gentlelady from wisconsin for coming down and appreciate her comments, her hard work -- minnesota. thank you, i did know that. i apologize. i'm from minnesota. thank her for her efforts on this. and once again, i want to reiterate to folks that may be listening, we are gathering amendments. i believe they're stacking up. some are very relevant. some have pieces of relevancy. and what we've been trying to do is take the best i think of each one and try to formulate a plan to move forward and try to get some votes obviously today and tomorrow and get this done as quickly as possible to get it over to the house.
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but just so you know, i would once again reiterate my -- my request to have all amendments be relevant to the issue at hand, so as senator lieberman -- i'm not going to be quoting dr. seuss, like he did -- but i certainly want to make sure we get a bill that actually has a chance not to get bogged down and pass very -- very expeditiously. so just to let folks know in the gallery and also on the television, there has been some very good amendments, good ide ideas. some actually we may end up combining, and there are amendments that are coming up in the days ahead that we haven't had a chance even to look at because the amendments are coming in fast and furious. so to get out and try to, you know, comment as to what we're doing with this amendment, that amendment, listen, there's good points on virtually every amendment and we need to make sure that we get the best i think and strongest bill we possibly can. so i just wanted to add that. i don't see any other -- well, i see senator mccaskill is here.
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a senator: mr. president? mr. brown: i apologize. i yield the floor to my friend. the presiding officer: the senator from pennsylvania. a senator: thank you, mr. president. i'd like to take a moment to discuss an amendment that i think is relevant to this discussion and i want to thank my colleague, senator mccaskill, for her work on this topic. mr. toomey: and it goes to the issue of the integrity by which this body and congress in general operates, which certainly is a central issue regarding this particular bill. our amendment goes to a particular aspect of -- of the integrity of this body and my concern is in the absence of our amendment, many of our colleagues will likely resume a very wasteful, nontransparent process which is prone to corruption itself and abuse and that's the process of earmarking. and so i want to speak a little bit about earmarks and what they are and why i think we ought to have a permanent legislative ban
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on the process. and -- and let me be clear about the process. earmarks exist precisely in order to circumvent any real scrutiny, transparency, or any process by which this body, our other body or the american people can evaluate the merits of a given project. there's no authorization to earmarks. there's no proper scrutiny. there's no competitive bidding among competing demands for resources. i think the process itself is indefensible and, in part, because the process is so badly flawed, we shouldn't be surprised that it leads to extraordinary waste. and we've seen it. some of the earmarks have become famous because they're so wasteful and inappropriate. we all heard about the bridge to nowhere. recent earmarks include, above and beyond that, a million-dollar alternative salmon products earmark. there was $1.9 million earmarked
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for the charles wrangle center for public service requested by nonother than congressman charles rangle. $550,000 for a glass museum. $2.5 million for arctic winter games. the list goes on and on and on. i could go on all day with indefensible projects that got into law, taxpayer dollars that were spent precisely because thee earmarks were permitted. mr. president, i would argue that it has gotten to the point where it really adds up to really dollars and cents. i know there are those who want to resume earmarking who like to suggest that, well, it's not a big number. it doesn't really add up to a whole lot of money. well, over the course of the last 15 years, the total value of taxpayer dollars spent this way has tripled. and in the last congress, it reached $37 billion -- $3 billion. you know, one of the other things that i think is particularly pernicious about earmarks is that over time, they became a currency that's used to buy votes because there's this
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unwritten law that if you ask for an earmark in a spending bill and you get it, you're obligated to vote for that bill, regardless of how bloated, inappropriate, wasteful or otherwise nonsensical that bill might be. that's a really terrible process. and, finally, the fact is, it's an opportunity for corruption. i'm not suggesting that there's corruption involved in most earmarks. i'm sure there's not. but we do know some examples of some of our colleagues who, in fact, did use earmarks quite inappropriately to enrich themselves. i know of one who's in jail right now because of that. and while that is certainly the very unusual exception, the fact is, a process like that is badly flawed and should be remedied. now, as we all know, there is a current temporary moratorium in place on earmarks that has been adopted by both bodies and both parties, but that temporary moratorium expires this year. and so what our amendment does is it creates a permanent legislative ban on earmarks and
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it does that by creating a point of order. any senator can come down to the senate floor and strike an earmark if one is inserted in a spending bill and it would take a two-thirds vote of the senate to override the effort to strike the earmark. it's important to note that this amendment does not strike the entire bill. it wouldn't invalidate the bill or otherwise disrupt the bill. it would surgically remove the earmark that would be offending this point of order. so as i say, i want to thank senator mccaskill for -- for her support in this. i want to thank senator coburn for the many years in which he has battle, as have others and especially senator mccain and others. but, you know, senator coburn once described earmarks as the gateway drug to spending addiction, and i think he's really on to something with that characterization. see, i think it's time that we change the culture in washington, that we change the culture of congress, get away
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from a culture that says, how can we maximize spending, which really has been the culture of congress for way too long, and move to a culture that says, how do i -- how do we maximize savings? because when we're running trillion-dollar annual deficits, we've got to find savings everywhere we can, and i can't think of a better place to start. so if we really want to change washington, if we really want to reduce wasteful spending, if we really want to eliminate opportunities for corruption, if we really want to change the culture of spending and begin in the process of doing these things to hopefully restore some of the american people's confidence in their government, one of the ways we can do this very constructively is to pass this amendment. with that, mr. president, i yield the floor. mrs. mccaskill: mr. president? the presiding officer: the senator from missouri. mrs. mccaskill: well, i want to thank senator toomey for joining with me, and he has been a great leader on this since he's arrived in the senate in
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terms of fight against earmarks. i want to thank him for that. i also want to welcome him to our band of warriors in terms of fighting the earmark culture in washington. it has been a fairly small number of senators since i arrived here in january of 2007. and i'll be honest, i had -- the senator has spent some time in the house so he was more familiar with the process of earmarking than i was when i came to the senate. i didn't really understand how it worked. i didn't really get it. and i don't think until you've gotten here and watched it from the inside that you truly appreciate how flawed this is in terms of a way of distributing public money. it really is going in the back room and sprinkling fairy dust. it really is a process that has more to do with who you are and who you know than merit. now, have there been lots of projects that have been funded that have -- i've supported?
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of course. and did i make a decision, a difficult one, to not cherry-pick certain earmarks during my career to go after with amendments on the floor? instead, i have tried from the day i got here and realized the process to reform the process, not just to say, oh, let's find this one earmark in this bill and gin up an amendment on it. but, rather, let's try to stop the process in its entirety, because it makes no sense, and that's what this amendment does. it actually will stop the process in its entirety. now, why do we need it if we've a moratorium now? i mean, frankly, when i first started saying i wanted to do with all earmarking, i was laughed at by members of this body directly and indirectly, and sometimes i felt like people were patting me on the head and saying, now go away. you have no chance to do this. i'm proud of the fact that we've got an mrlt now. but the truth is -- that we've gotten a moratorium now.
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but the truth is, there are a lot of members of this body that want to go back to the old ways and i think it is very important that we do a permanent ban. and i certainly thank the senator for helping with this and i think the amendment that we're working on together will make sure we don't have what happened in the house this year. a senator: will the senator yield for a question? the presiding officer: the snr from pennsylvania. a senator: thank you very much for yielding. i want to tux on a point that is more than to underscore. i think you and i would agree without hesitation that there are any number of earmark projects that probably had very good merit. this is not to suggest that every earmark that's ever occurred had no merit. that's not what this is about. what we're criticizing here and what we're trying to change is a very, very badly flawed process that permits a great deal of projects that do have no merit to get funded that wouldn't otherwise be funded. those that have merit -- and
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goodness knows there are all kinds of projects -- especially transportation projects -- that ought to be funded but they ought to be funded in a transparent and honest way, subject to evaluation by an authorizing committee, subject to cometion so that those -- subject to competition so that those projects with the greatest merit and need would be funded first. we're trying to get away from this process where a an individual member of either this body or the other body, you know, in the dark of night can drop in some specific provision because he or she wanted it without it being subject to the proper scute knee and evaluation and -- proper scrutiny and evalueuation that the -- evaluation that the taxpayer deserves. a senator: thank you. i would tell you that i think too long too many senators believed that the measure of their worth as a senator had everything to do with how much money they were bringing home. ms. mccaskill: and i've got a
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new idea. instead of the measure of your worth being how much you can spend, i think the measure of your worth ought to be how much you can save. and this place turned on the notion that if you stayed here long enough, then you got to be an appropriator. if you got to be an appropriator, then you got more earmarks. if you got to be a ranking on an a subcommittee of an appropriations, you got even more. and then i found out about honey pots. i didn't even know about honey pots until i got here. honey pots are -- and i don't know that you're fum familiar wh that term. a honey pot is what the ranking minority member and chairman set aside as their special pot of money that they get to spend on earmarks that is greater than everyone else's and wha some of the subcommittee appropriations committees have honey pots and some don't. and the very notion that we're deciding how to divide up the money based on how long you've been here, what party you're in,
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what committees you serve on, you know, that's not the way you spend public money. you spend public money based on merit or on a formula, based on how many people are in your state. and one of the other things that drives me crazy is this talkingpoint against doing away with the earmarks, well, we can't get the bureaucrats decide. we can't get the bureaucrats decide, we can't let the executive branch decide. it is the power of the purse. we've a had the power of the purse in congress for hundreds of years. earmark something a modern invention. we have the right to oversee the executive budget, change the executive budget, add money to the executive budget. we can do that as congress and that has nothing to do with earmarking. let me also say this about this talking point. this notion that earmarked money just arrives on trees somehow -- where does the money for earmarking come from? well, it comes from other programs and guess what programs
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it's taken from? it's taken from programs like -- i'll just say -- like surface transportation. let's talk about that. we have a local process in missouri. we have stakeholders all across the state that go to meetings and the public is invited and these agencies work very hard at trying to prioritize their transportation projects based on the economic needs of their community, based on safety considerations and these local folks work really hard to prioritize their projects. and what does earmarking do? cuts in line. one individual's judgment supplants all of the local planning. this isn't about washington bureaucrats. in a lot of these instances, it's about saying, well, i know better than the people back home know. and i have i'd rather decide -- and i'd rather decide, look at the byrne grants -- another perfect example. money for the byrne grants, which is a state-administered program done on a competitive
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basis at the state level -- they've stealing money out of the burn plants for -- the byrne grants for years. this sheriff needs new equipment as opposed to the state authorities disietding that there maybe is a crime problem in one area of the state like a methamphetamine problem that needs special attention. so -- mr. toomey: will the senator yield? ms. mccaskill: absolutely. mr. toomey: thank you very much. that is common refrain from knows who like to go back to earmarking that we can't turn this over to the bureaucrats. who is it that controls the bureaucrats? it is cofnlgt if we think the bureaucrats are allocating resources in a way that we don't approve of, we can change the rules. we write the law that determines the criteria, the metrics, the process by which they compete and evaluate competing projects. that's entirely up to us. so it is not fair for us to suggest that the bureaucrats won't spend it wisely. well then we should set the rules so that they must.
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and frankly, they don't have the kind of incentives that some people who are holding elective office think they have to try to show up back home with a big oversized check. the bureaucrat doesn't have that incentive. so i would argue that i can't imagine any bureaucrat that would award several hundred million dollars to build a bridge to nowhere or to build a cowgirl hall of fame or an indoor tropical rainforest. these are things that, if a bureaucrat did make those decisions, it would be because they were following ridiculously flawed guidelines given to them by congress. so this in no way diminishes congress's control of the purse strings. it just insists insists on a me accountable process by which we allocate the resources from the purse. ms. mccaskill: it is easy to see why earmarking is held so dear to so many members. i remember when i first was elected and people began showing up in my office that frankly had
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not been big supporters of mine. and, you know, all of us that are here for if we're really, really honest with folks back home, we want to be loved. you know, we put ourselves out there for public acceptance or rejection every two, four, or six years, and so when people start showing up being really nice to me that have not particularly been supporters of mine and, you know, they were really being nice to me and i thought, what's up here? and then all of a sudden, i figured it out. they were all showing up to get their earmarks. and you know, the people of missouri -- i don't know about pennsylvania, senator toomey -- but in missouri they're very worried about not having earmarks, because they've been fed this line, well, if we don't have earmarks, we're not going to get our share, we're not going to get as much as we deserve. let's just take water, for example. pennsylvania, this is a good example, because you guys didn't get very much money in water projects either. i don't know how many rivers that you have in pennsylvania --
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i should be more familiar with your geography. but to say that missouri is a river statement is an understatement -- i mean to say that mo is a river state is an understatement. we have the confluence of the two greatest rivers of ow country, the missouri and mississippi, in our state. we have major impact in terms of water projects that need to be done in our state because of how prominent water is in the state of missouri. but yet we have been way down the line in terms of water projects. because we didn't have an appropriator on that committee. now, we had appropriators on other committees, but not on that committee. so i keep telling the folks at home, if we compete with other states for water projects, we're going to do just fine. and that's the way it's supposed to work. states are supposed to get what they need. and not get the ben nevilleence of washington because they --
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and not get the benevolence of washington because they have the right chairmanship or ranking committee so they can get even more. that's not the way this place should run. it is not the way to spend public money. mr. toomey: will the senator yield? ms. mccaskill: yes. too many i can tell you how i think a big majority of -- mr. toomey: i can tell you i had i think a big majority of pennsylvanians feel about this. i think the vast majority of pennsylvanians and i would guess of americans generally understand that especially at a time when we have reached $15 trillion in debt, when our debt now exceeds the entire size of our economy, when we're running annual deficits of over $1 trillion for the last several consecutive years and frankly probably in the years to come, this is -- we are in an unsustainable mode right now and what my constituents want is for us to put ourselves son a viable, sustainable fiscal path. and that means getting spending
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under control. so i don't think our constituents want us to see how much money we can spend, as you pointed out. they want to see how much we can save and i think they would overwhelmingly welcome ending a process that clearly leads to wasteful spending. ms. mccaskill: i think you're right, senator toomey. and i hope we get a vote on this amendment. i am not optimistic about that, but -- because typically -- i mean, let's just be honest much the vast majority of the leadership in this body have typically been appropriators. and they have -- many of them want to go back to earmarking, and i -- and this is on both sides of the aisle. as i started to point out before, it was the republican armed services committee in the house that set aside a slush fund and began, you know, doing earmarking in the defense authorization bill. now, we were able to stop it, expose it and stop it. but, clearly, people are having
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a hard time breaking this habit. so i think this amendment is very important. i am happy to go toe to toe with anyone over the merits of this amendment of i am happy to stand shoulder to shoal diser with anyone in this congress that is willing to stop this process once and for all. i think this amendment would do it. i hope we get a vote on it and i will -- if we don't, it won't the last time i think they'll hear from both of us, senator too maniy, about our bill. and how serious we are about getting it passed. there will come a time that this bill will pass because the american people are on to us. the american people are on to this bad habit. they want it to end, and they will have their way. it may not be today, it may not be this week. but i remind the members of the senate that it wasn't that long ago that people laughed out loud at me when i said thrbled an end to earmarking. they thought that was the sillyest joke they'd ever heard.
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and we've made a lot of progress, thanks to the american people, by the way. this should not -- the credit should not go to me or senator mccain or senator coburn who have been working on this for much longer than i have. it should go to the american people who are figuring this out and rising up in record numbers to say, we don't like earmarks. stop it. credit them for paying attention. i hope they stay on it and i hope we will ventionly prevail in this importantvite. mr. toomey: i certainly appreciate your kind indulgence here, i am -- i'm newer to this body than you are. maybe that explains my relative optimism. if we do get a vote, i am hopeful that it will succeed. and i point to the voluntary moratorium that both parties in both chambers instituted a year ago as a sign that this is increasingly becoming the consensus view among members of both bodies. i don't know if i'm right, but i
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am hopeful. i am not going to give up. i agree with you completely. if we don't succeed today, that just means we need to come back on another day when we can succeed because there is no doubt in my mind that the people of pennsylvania and america want us to win this battle and rein in spending. there is no better place than to ban these earmarks. i yield. ms. mccaskill: and i also yield, mr. president. and i thank the senator for his work on this. this should be -- this should be the easiest for us to get done. we've got some hard things we've got to do around here that are going to mean sacrifice and changes that are not going to be easy for anyone. this ought to be simple. so let's try to get it done, and i yield the floor..
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mr. lieberman: mr. president, i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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quorum call:
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